Flutter Entertainment plc (FLUT) is interested in partnering with Boyd Gaming Corp. (BYD) to buy the interactive assets of casino operator Penn Entertainment Inc. (PENN), according to sources familiar with the situation.

The potential Flutter interest comes as Penn Entertainment recently received an indication of interest from Las Vegas-based Boyd, a fellow casino operator.

In a potential Boyd-Flutter deal, Penn’s 43 gaming properties in 20 states would go to Boyd while Flutter would purchase Penn’s ESPN Bet partnership and its Score Media and Gaming business, which was acquired in 2021 for $2.1 billion.

Flutter and Boyd recently took steps that appear to be readying for M&A and ESPN-related contract negotiations.

On July 1, Flutter added former Walt Disney Co. (DIS) CFO Christine M. McCarthy as a director — Penn signed a 10-year partnership with Disney for the ESPN Bet rights in August. Meanwhile, in June, Boyd added Michael Hartmeier, a former hospitality and gaming banker at Credit Suisse AG and Lehman Brothers Inc., to its board.

Boyd and Flutter are also familiar with each other. The Las Vegas-based casino operator owns a 5% stake in Flutter’s U.S. online better property FanDuel. Flutter could be interested in buying the stake, which Boyd received in exchange for an exclusive sports betting license agreement that runs through 2028, two people familiar with the situation said.

Boyd’s management in June reportedly told a Stifel conference that the gaming company gets no credit for the 5% stake in FanDuel in its stock price.

Flutter could pay about…

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Editor’s note: The original version of this article was published on July 05, 2024 at 11:31 AM on The Deal’s premium subscription website. For access, log in to TheDeal.com or use the form below to request a free trial.
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Penn and Boyd didn’t respond to several requests for comment.

Flutter declined to comment.