Champions boast of selling their FanDuel shares and their robust presence in regional and local markets, particularly in Las Vegas.
Boyd Gaming Strengthens Financial Position with FanDuel Sale
Boyd Gaming, a leading gaming and entertainment company, has announced the sale of its 5% equity stake in FanDuel Group for approximately $1.755 billion in cash. This significant transaction strengthens the company's financial position, providing a large influx of capital and enhancing its balance sheet [1][2][4].
The deal not only unlocks unrealized value but also secures long-term, predictable revenue streams through market access agreements with FanDuel, extending the partnership to 2038 [2][3]. Boyd Gaming will regain operational control over its retail sportsbooks outside Nevada in 2026 [2].
The substantial cash proceeds enable Boyd Gaming to accelerate growth initiatives. The company plans to reinvest in its 28 gaming properties across 10 states, potentially expanding and enhancing operations [1]. The sale also empowers Boyd to pursue attractive growth opportunities more strategically and sustain shareholder returns through share repurchases and dividends [1].
In fact, Boyd has authorized an additional $500 million share repurchase around the same period, increasing its capacity to return capital to shareholders [1]. However, the transaction reduces Boyd's direct equity exposure to the fast-growing but more volatile online segment, focusing instead on operational and contractual revenue [3].
In the second quarter, Boyd Gaming reported strong earnings, with the Las Vegas locals segment achieving its strongest quarterly growth in more than two years. The growth was reflected in year-over-year growth in both revenue and adjusted EBITDAR, with segment margins nearly at 50% [4].
The growth was also reflected in all operating segments, including online and managed segments. Boyd Gaming's President and CEO, Keith Smith, asked analysts to focus their questions during the earnings call on the second quarter results rather than the FanDuel sale [4].
Smith highlighted that the deal generated nearly $2 billion in value for shareholders from a $10 million investment [4]. He also mentioned that the stock price hasn't reflected the "true price" for the investment in FanDuel [4].
Despite the strong performance, one property that struggled was The Orleans west of the Strip, which relies on tourists as a destination resort. The transaction further enhances Boyd Gaming's financial flexibility, with after-tax proceeds expected to be about $1.4 billion or $17 per share, saving $85 million in interest payments [2].
Under terms of the revised market-access agreements with FanDuel, Boyd now expects its online segment to generate $50 million to $55 million in operating income and adjusted EBITDAR for the full year 2025 and about $30 million in 2026 [2].
In summary, the sale of Boyd Gaming's 5% FanDuel stake strengthens the company's financial position, secures long-term, predictable revenue streams, provides capital for growth initiatives, enables shareholder returns, and reduces direct equity exposure to the online segment. This transaction positions Boyd Gaming for more stable and strategically controlled growth, trading equity upside for financial strength and predictable income [2][3][4].
[1] Boyd Gaming to Use Proceeds from FanDuel Sale to Pursue Growth Initiatives and Return Capital to Shareholders [2] Boyd Gaming Sells FanDuel Stake for $1.755 Billion, Strengthening Financial Position [3] Boyd Gaming's FanDuel Sale: A Strategic Pivot Focusing on Financial Strength and Predictable Income [4] Boyd Gaming Reports Strong Second Quarter Results, Focuses on FanDuel Sale During Earnings Call
In the wake of Boyd Gaming's sale of its FanDuel stake, the company is expected to allocate the substantial cash proceeds towards pursuing growth opportunities in its business and finance sector. The sale also empowers Boyd to strategically pursue more attractive business expansions by means of share repurchases and dividends, as well as reducing direct equity exposure to the casino-and-gambling-focused online segment.
