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FAIR VALUE MEASUREMENTS
 12 Months Ended
Dec. 31, 2024
Fair Value Disclosures [Abstract]  
FAIR VALUE MEASUREMENTS FAIR VALUE MEASUREMENTS
The Group’s consolidated financial instruments including cash and cash equivalents, player deposits, accounts receivable, other current assets, accounts payable, player deposit liability, and other current liabilities are carried at historical cost. As of December 31, 2024 and 2023, the carrying amounts of these financial instruments approximated their fair values because of their short-term nature.
The carrying amount of long-term debt outstanding under the Credit Agreement approximate their fair values, as interest rates on these borrowings approximate current market rates. The fair value of the USD Senior Secured Notes and Euro Senior Secured Notes was $533 million and $540 million, respectively as of December 31, 2024. The fair values are based on quoted market prices.
The following tables set forth the fair value of the Group’s financial assets, financial liabilities and redeemable non-controlling interests measured at fair-value-based on the three-tier fair value hierarchy as defined in summary of significant accounting policies:
 As of December 31, 2024
($ in millions)Level 1Level 2Level 3Total
Financial assets measured at fair value:
Available for sale – Player deposits – investments$128 $2 $— $130 
Equity securities— — 6 6 
Derivative financial assets— 133 133 
Total128 135 6 269 
Financial liabilities measured at fair value:
Derivative financial liabilities— 15 — 15 
Fox Option Liability— — 810 810 
Contingent consideration— — 18 18 
Total— 15 828 843 
Redeemable non-controlling interests at fair value$— $— $1,567 $1,567 

 As of December 31, 2023
($ in millions)Level 1Level 2Level 3Total
Financial assets measured at fair value:
Available for sale – Player deposits – investments$33 $139 $— $172 
Equity securities— — 9 9 
Total33 139 9 181 
Financial liabilities measured at fair value:
Derivative financial liabilities— 178 — 178 
Fox Option Liability— — 400 400 
Contingent consideration— — 20 20 
Total— 178 420 598 
Redeemable non-controlling interests at fair value$— $— $1,100 $1,100 
Pokerstars trademark held and used1
$— $— $368 $368 
Total nonrecurring fair value measurement— — $368 $368 
_______________
1In accordance with subtopic 360-10, Pokerstars trademark held and used with a carrying amount of $1,093 million was written down to its fair value of $368 million, resulting in an impairment of $725 million, which was included in sales and marketing expenses. See “Note 11. Intangible Assets, Net” for a description of the valuation technique(s) and the inputs used in the fair value measurement.
There were no transfers between levels of the fair value hierarchy during the years ended December 31, 2024 and 2023.
Valuation of Level 2 financial instruments
Available for sale – player deposits – investments
The Group has determined the fair value of available for sale – player deposits – investments by using observable quoted prices or observable input parameters derived from comparable bonds/markets. Although the Group has determined that a number of the bonds fall within Level 1 of the fair value hierarchy, there are a class of bonds which have been classified as Level 2 due to the existence of relatively inactive trading markets for those bonds.
Derivative financial assets and liabilities – Swap agreements
The Group uses derivative financial instruments to manage its interest rate and foreign currency risk. The valuation of these instruments is determined using widely accepted valuation techniques including discounted cash flow analysis of the expected cash flows of each derivative. This analysis reflects the contractual terms of the derivatives, including the period to maturity, and uses observable market-based inputs, such as yield curves, spot and forward FX rates.
The Group incorporates credit valuation adjustments to appropriately reflect both its own non-performance risk and the applicable counterparty’s non-performance risk in the fair value measurements. In adjusting the fair value of its derivative contracts for the effect of non-performance risk, the Group has considered the impact of netting and any applicable credit enhancements, such as collateral postings, thresholds, mutual puts and guarantees.
Although the Group has determined that the majority of the inputs used to value its derivatives fall within Level 2 of the fair value hierarchy, the credit valuation adjustments associated with its derivatives utilize Level 3 inputs, such as estimates of current credit spreads to evaluate the likelihood of default by itself and its counterparties. For the years ended December 31, 2024 and 2023, the Group assessed the significance of the impact of the credit valuation adjustments on the overall valuation of its derivative positions and determined that the credit valuation adjustments are not significant to the overall valuation of its derivatives.
As a result, the Group determined that its valuations of its derivatives in their entirety are classified in Level 2 of the fair value hierarchy.
Valuation of Level 3 financial instruments
Equity securities
The Group determined the fair value of investments in equity securities that do not have a readily available market value amounted to $6 million at December 31, 2024 (December 31, 2023: $9 million) using the Market Comparable Companies Approach based on EBITDA multiple. The total unrecognized loss of $2 million for the year ended December 31, 2024 (December 31, 2023: $2 million loss, December 31, 2022: $6 million gain) is recognized with other income (expense), net in the Consolidated Statements of Comprehensive (Loss).
Non-derivative financial instruments
Fox Option Liability
On October 2, 2019, the Group entered into an arrangement with Fox Corporation (“Fox”), pursuant to which FSG Services LLC, a wholly-owned subsidiary of Fox, has an option (the Fox Option) to acquire an 18.6% equity interest of the then outstanding investor units (the “Fastball Units”) in FanDuel Group Parent LLC (“FanDuel”). In April 2021, Fox filed an arbitration claim against the Group with respect to its option to acquire an 18.6% equity interest in FanDuel seeking the same price that the Group paid for the acquisition of the Fastball Units (37.2% of FanDuel) from Fastball Holdings LLC in December 2020. On November 7, 2022, the arbitration tribunal determined the option price as of December 2020 to be $3.7 billion plus an annual escalator of 5%. As of December 31, 2024, and December 31, 2023, the option price was $4.5 billion and $4.3 billion, respectively. Fox has a ten-year period from December 2020 within which to exercise the Fox Option, should it wish to do so, and should Fox not exercise within this timeframe, the Fox Option shall lapse. Cash payment is required at the time of exercise and the Fox Option can only be exercised in full. Exercise of the Fox Option requires Fox to be licensed.
As of December 31, 2024, and December 31, 2023, the fair value of the Fox Option amounting to $810 million and $400 million, respectively, included in other non-current liabilities, was determined using an option pricing model. The significant unobservable inputs were the enterprise value of FanDuel, the discount for lack of marketability (“DLOM”), the discount for lack of control (“DLOC”), implied volatility and probability of Fox getting licensed.
The enterprise value of FanDuel was determined giving an equal weight to the value indications of the discounted cash flow analysis and the guideline public company analysis. The discount rate used in the discounted cash flow analysis was 20% and 21% for the years ended December 31, 2024, and December 31, 2023, respectively. The enterprise value (EV)-to-revenue multiple for the last twelve months and the projected twelve months used in the guideline public company analysis was 4.5x and 3.3x for the year ended December 31, 2024, and 4.8x and 3.4x for the year ended December 31, 2023, respectively, with the ranges of revenue multiples of selected comparable companies being 1.3x–5.5x and 1.1x–6.2x for the years ended December 31, 2024, and December 31, 2023, respectively. The median was 3.0x (December 31, 2023:2.6x) for the last twelve months and 2.5x (December 31, 2023:2.3x) for the projected twelve months for the comparable companies. The arithmetic average was 3.1x (December 31, 2023:3.2x) for the last twelve months and 2.6x (December 31, 2023: 2.6x) for the projected twelve months for the comparable companies. In developing the fair value measurement, management placed greater weight on multiples of peer group companies that were most directly comparable to FanDuel from within the selected guideline public companies. The key value drivers considered while assigning weights to multiples of peer group companies were profitability (profit margins), future growth prospects, and size of peer group companies, among others. The result of this calibration was that a multiple between the third quartile and high end was deemed most appropriate to develop the required fair value measurement.
Additionally, management applied a combined 33% and 35% discount for lack of marketability and lack of control for the years ended December 31, 2024, and December 31, 2023 respectively. Management estimated the DLOM considering outputs from various securities-based approaches that included the Asian Protective Put, Finnerty method and Protective put (Chaffe) method. A range of DLOMs obtained using these approaches was 12.1% to 18.9%. To cross-verify the estimated DLOM, management also conducted restricted stock studies and observed average or median DLOMs in the range of c. 10.9% to c. 45.0%. Management also considered pre-initial IPO studies that indicate median DLOMs to be potentially in a range of 6.15% to 82%, with an arithmetic average of 46.96% within the population of post-2008 IPOs considered in the study. DLOC was estimated at 18.40% using implied discounts in previous observable transactions involving FanDuel’s equity ownership and data based on Mergerstat studies for the years ended December 31, 2024 and December 31, 2023. To cross-verify the estimated DLOC, Management has calculated the implied DLOC using the control premium used in goodwill impairment studies.
The combined discounts range from 28.3% to 33.8% and 29.7% to 36.0%, with management having selected 33% and 35%, which is on the lower end of the third quartile, but above the arithmetic average as most appropriate to develop the required fair value measurement for the years ended December 31, 2024, and December 31, 2023, respectively.
The volatility was 35% and 36% for the years ended December 31, 2024, and December 31, 2023, respectively, with the volatility range of the selected comparable companies being 18.1%–90.7% for December 31, 2024 and 23.3%–58.7% for December 31, 2023. In developing the fair value measurement, the probability of a market participant submitting to and obtaining a license was estimated at 75% for the years ended December 31, 2024, and December 31, 2023.
Changes in discount rates, revenue multiples, DLOM, DLOC, volatility and probability of Fox getting licensed, each in isolation, may change the fair value of certain of the Fox Option. Generally, an increase in discount rates, DLOM and DLOC or decrease in revenue multiples, volatility and probability of FOX getting licensed may result in a decrease in the fair value of the Fox Option. Due to the inherent uncertainty of determining the fair value of the Fox Option, the fair value of the Fox Option may fluctuate from period to period. Additionally, the fair value of the Fox Option may differ significantly from the value that would have been used had a readily available market existed for FanDuel Group LLC. In addition, changes in the market environment and other events that may occur over the life of the Fox Option may cause the losses ultimately realized on the Fox Option to be different than the unrealized losses reflected in the valuations currently assigned.
Redeemable non-controlling interests at fair value
The terms of symmetrical call and put options agreed between the Group and Boyd require exercise price to be calculated at fair market value without giving effect to DLOM and DLOC. FanDuel’s pre-discount enterprise value determined in the same manner as discussed earlier is considered in measuring the fair value of redeemable non-controlling interests owned by Boyd.
Contingent consideration
The contingent consideration payable is primarily determined with reference to forecast performance for the acquired businesses during the relevant time periods and the amounts to be paid in such scenarios. The fair value was estimated by assigning probabilities to the potential payout scenarios. The significant unobservable inputs are forecast performance of the acquired businesses.
The fair value of contingent consideration is primarily dependent on forecast performance for the acquired businesses in excess of a predetermined base target. An increase and decrease in the predetermined base target will not have a material impact on the fair value of contingent consideration as the expected settlement date is in early 2025. An increase or decrease of 10% in the excess over the predetermined base target would increase and decrease the value of contingent consideration as of December 31, 2023, by $2 million and $2 million, respectively.
Movements in the year in respect of Level 3 financial instruments carried at fair value
The movements in respect of the financial assets and liabilities and redeemable non-controlling interests carried at fair value are as follows:
($ in millions)Contingent
consideration		Equity
securities		Fox
Option
Liability		TotalRedeemable non-
controlling
interest at fair
value
Balance at December 31, 2023$(20)$9 $(400)$(411)$(1,100)
Total gains or losses for the period:
Included in earnings3 (2)(426)(425)— 
Included in other comprehensive (loss)(1)(1)16 14 — 
Attribution of net loss and other comprehensive (loss):
Net gain attributable to redeemable non-controlling interest— — — — (25)
Other comprehensive (loss) attributable to redeemable non-controlling interest— — — — 13 
Acquisitions and settlements:
Settlements— — — — — 
Adjustment of redeemable non-controlling interest at redemption at fair value— — — — (455)
Balance at December 31, 2024$(18)$6 $(810)$(822)$(1,567)
Change in unrealized gains or losses for the period included in earnings$3 $(2)$(426)$(425)$— 
Change in unrealized gains or losses for the period included in other comprehensive (loss)$(1)$(1)$16 $14 $— 
($ in millions)Contingent
consideration		Equity
securities		Fox
Option
Liability		TotalRedeemable non-
controlling
interest at fair
value
Balance at December 31, 2022$(22)$11 $(220)$(231)$(781)
Total gains or losses for the period:
Included in earnings2 (2)(165)(165)— 
Included in other comprehensive income— — (15)(15)— 
Attribution of net loss and other comprehensive income:
Net gain attributable to redeemable non-controlling interest— — — — (11)
Other comprehensive income attributable to redeemable non-controlling interest— — — — (50)
Adjustment of redeemable non-controlling interest at redemption at fair value— — — — (258)
Balance at December 31, 2023$(20)$9 $(400)$(411)$(1,100)
Change in unrealized gains or losses for the period included in earnings$2 $(2)$(165)$(165)$— 
Change in unrealized gains or losses for the period included in other comprehensive income$— $— $(15)$(15)$— 
($ in millions)Contingent
consideration		Equity
securities		Fox
Option
Liability		TotalRedeemable non-
controlling
interest at fair
value
Balance at December 31, 2021$(51)$7 $(330)$(374)$(982)
Total gains or losses for the period:
Included in earnings6 6 83 95 — 
Included in other comprehensive (loss)2 — 27 29 — 
Attribution of net loss and other comprehensive income:
Net loss attributable to redeemable non-controlling interest— — — — 19 
Other comprehensive income attributable to redeemable non-controlling interest— — — — 89 
Acquisitions and settlements:
Acquisitions Settlements21 (2)— 19 — 
Adjustment of redeemable non-controlling interest at redemption at fair value— — — — 93 
Balance at December 31, 2022$(22)$11 $(220)$(231)$(781)
Change in unrealized gains or losses for the period included in earnings$6 $6 $83 $95 $— 
Change in unrealized gains or losses for the period included in other comprehensive income$2 $— $27 $29 $—