High-profile gambling industry investor Kenneth Dart may have more than one major decision to make in the near future.

The Cayman Islands-based, US-born billionaire has this week raised his stake in Swedish gambling giant Evolution AB to 30.02% through his investment vehicle Candle Lake, triggering a mandatory takeover offer. 

Under Swedish takeover rules, Dart’s Candle Lake now has four weeks to either sell off shares to own under 30% of Evolution, or submit an offer for the remainder of the company’s shares.

It may not be the only situation akin to this for Dart in the next few months. 

Dart’s double

The prominent investor has also been gradually snapping up shares in listed gambling conglomerate Flutter Entertainment – the owner of brands including Paddy Power, Sky Bet, Betfair, FanDuel and PokerStars.

Dart now holds a stake of around 29% in the group according to company filings from 29 June, and if this rose to 30% it would also pass the threshold requiring the launch of a mandatory takeover – despite Flutter’s New York and London dual-listing – due to it being incorporated in Ireland. 

The Irish Takeover Panel Act applies to any “relevant company”, which is legally defined to include any Irish public limited company that currently trades – or has traded within the past five years – on the London Stock Exchange, New York Stock Exchange or Nasdaq.

With Flutter fitting this criteria, it remains firmly under the jurisdiction of the Irish Takeover Rules.

Of course, Dart will be aware of this situation. It remains to be seen whether he will make a full takeover attempt for Evolution, never mind up his stake in Flutter to a point where a similar decision will have to be made. 

Both companies have been the subject of recent scrutiny and share price dips – Evolution has dropped by 16% in the past year and its stock is now trading at SEK 735.60, while Flutter has suffered a mammoth 65% dip in that time and its shares now sit at a price of around $105. 

Evolution’s recent regulatory woes may come into consideration for Dart as he weighs up a takeover offer. 

The company recently agreed a £4.75m settlement with the UK’s Gambling Commission for AML breaches and supplying games to two unlicensed operators, with the Commission stating that it considered removing the PLC’s UK license altogether.

It is also involved in a long-standing dispute over grey and black market operations with rival listed supplier Playtech, which is likely to come to a head later this year.

On a more positive note for Dart, Evolution noted in its latest financials that it had returned to European growth amid what has been a period in which the continent’s gambling companies have been plagued with a variety of headwinds.

Despite its share price dipping over the past 12 months, the last six of those have been a different story, with Evolution’s stock rebounding by nearly 25% in that timeframe. 

Under Swedish rules, Dart’s bid for the business has to be, at the minimum, as high as the highest price Candle Lake paid for Evolution shares throughout the last six months – the period in which that stock rebound occurred. 

Dart’s 30.02% stake in Evolution means his investment in the company is valued at £3.27bn, and his holdings of 28.92% in Flutter means that he controls around £4bn of that business – based off the firms’ respective market caps of £10.9bn and £13.82bn. 

That makes the value of his investments in those two companies alone around an eye-watering £7.27bn. However, a decision to take over the third- and fourth-largest gambling PLCs on the planet would even further massively increase that value. 

It seems rather unfeasible that Candle Lake will make a Dart (apologies) to acquire both of these global gambling behemoths, though it is a question that must be raised given these recent financial moves.