He made his name and his fortune from motor racing and Formula One. But over the years, Eddie Jordan has also proven himself a shrewd businessman with investments ranging from property to vodka and from finance to yachts. Now, at the age of 73, could Eddie Jordan be on the cusp of arguably his biggest deal yet?

Mark Webber certainly seems to think so. The Australian former professional racing driver, who competed in Formula One from 2002 to 2013, posted on Instagram that Jordan was set to make waves with “a mega acquisition in gaming”.

And Webber, a close friend of Jordan, is on the money. The Currency has learned that Jordan is leading a $1 billion bid for the sports betting wing of Scientific Games (NASDAQ: SGMS), the $6.2 billion-valued US gambling business. The division, known as OpenBet, was put on the market by Scientific Games in recent weeks in an effort to slash its debts.

It is believed that Jordan has the support of Irishman Keith O’Loughlin, the industry veteran who has run OpenBet for SGMS. It is understood that Jordan, with O’Loughlin’s backing, has made an expression of interest for the division, whose clients include Paddy Power and Betfair.

Jordan and O’Loughlin are friends and cycle regularly together in Monaco. The move would be a welcome boost for the division’s 1,100 staff as O’Loughlin has overseen a period of rapid growth at the unit. The sports betting division directly manages around $10 billion of wagers per year. Oakvale Capital is managing the sale process on behalf of SGMS.

As well as charity and TV work, Jordan co-invests in UK properties with his sons. However, he is also an active investor in gaming stocks, hence his interest in OpenBet.

O’Loughlin, highly regarded in the industry, has previously been CEO for Boylesports Online where he dramatically grew the business. He then moved to Gibraltar and was the driving force behind Coral until its merger with Ladbrokes. Interestingly, he is a former CTO of Dermot Desmond’s Intuition Publishing when the business won many global awards for tech innovation under his watch. He was executive vice president with OpenBet Ltd, before it was sold to SGMS by the NYX Gaming Group in 2018. He has led the sports betting business for Scientific Gaming following the acquisition and has been the driver behind its transformation and foray into the US.

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A tycoon in the fast lane

 A Dubliner by birth, Eddie’s distinguished career in motorsport started behind the wheel but grew as the owner of Eddie Jordan Racing – later known as Jordan Grand Prix. He is widely respected by his peers and motorsport fans alike for his passion, success and unique style, particularly as a privateer. His ability to spot and bring on young driver talent is legendary. He gave World Champions Ayrton Senna and Damon Hill their first drives in F3, and another World Champion, Michael Schumacher, his first drive in F1. Other winners followed Ralf Schumacher, Eddie Irvine and Rubens Barrichello. The team went on to finish 3rd in the World Championship with Frentzen/Hill in 1999 after Jean Alesi and Johnny Herbert won the F3000 and F3 Championships respectively. Significantly, as many as seven ex- Jordan drivers also drove for Ferrari.

The altruistic side of Eddie Jordan is seen today in his various philanthropic interests, notably as patron of the child cancer charity, CLIC Sargent and The Amber Foundation for the young homeless. In addition, as a keen drummer, Eddie’s band – ‘Eddie & the Robbers’ – play at many charitable functions.

Eddie received an honorary OBE in 2012, adding to a number of other accolades for his contribution to motor racing and charity. He was knighted as an honorary Musketeer in France; the University of Ulster bestowed him an honorary doctorate, as did the Dublin Institute of Technology; the University College Dublin’s Literary and Historical Society awarded him the James Joyce Award; Trinity College Dublin’s University Philosophical Society awarded him the Gold Medal of Honorary Patronage. Alongside these, he has been the Entrepreneur of the Year and an Oxford University Union past speaker and he was recently inducted into the Irish Motorsport Hall of Fame.

Jordan is currently part of the award-winning C4/Whisper TV team’s hugely successful coverage of Formula 1, and he has and had many varied and diverse business interests including property investments in New York, London and Europe – both commercial and residential, property development, publishing/radio, and other private equity and other investments including Celtic Football Club, golf clubs, vodka and energy drinks. In addition, he has been a member of the Advisory Board to Citi Private Bank, and a board member of Oyster and a partner of the hedge fund, Clareville Capital.

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A red hot sector

The sports betting industry is red hot right now, which is good news for SGMS. SGMS has found itself in a spot of bother in recent times. In 2019, it had a large but manageable amount of debt. Then Covid-19 came along and casinos had to close.

Land-based retail casino betting is SGMS’s biggest business by far. Revenue from that segment dropped by 47 per cent in 2020. Overall revenue dropped 20 per cent.

A 20 per cent drop in revenue translated into a 54 per cent drop in Ebitda. For a company with a lot of debt, this is a serious problem. In 2020, SGMS’s net debt to Ebitda ratio blew out from 6.4 to 10.5.

For a company with too much debt, the only solution short of restructuring is to sell off assets and use the cash to pay its debt down. An indebted company is like a boat that’s laden down with cargo, taking on water, and needs to chuck some stuff overboard.

The balance companies have to strike here is to find assets that are worth a lot of money, but that don’t subtract much from the company’s earnings. Because earnings are what make debt sustainable in the first place.

The perfect asset for reducing a debt burden is worth a lot but doesn’t yet generate much earnings. A fast-growing business would fit the bill.

SGMS will have been seeing its debt trajectory, and seeing the bull market in anything to do with sports betting, and seen a solution to its problems. SGMS has a small but fast-growing sports betting division.

SGMS owns technology that lets customers operate sports betting books and also provides trading and risk management. It acquired Don Best trading in 2018 and this was the impetus for its trading growth, and it is now reputed to manage a portfolio that is one of the largest in the world in terms of dollars wagered.  The technology is “white label”, meaning customers can customise it and put their own branding on it. Some of the biggest brands in the world use this as their core including SkyBet, William Hill, Ladbrokes, Coral, Fanduel, SportsBet etc.

There’ll be plenty of interest in the sports betting business. Valuations of sports betting technology companies are very high at the moment. A lot of these valuations are being benchmarked against a company called DraftKings.

DraftKings is one of the two main fantasy sports apps in the US, the other being FanDuel (owned by the Flutter group). The fantasy sports apps suddenly got very important after the US Supreme Court ruled that states were entitled to allow betting on sports. Fantasy Sports apps are the logical place from which to launch sports betting business since they already have tens of millions of young sports-mad users.

DraftKings launched on the stock market two years ago, in July of 2019. Since then, the stock has gone bananas. By March of this year, it had risen almost 700 per cent. Right now, it's up 444 per cent from its IPO price.  There is talk of Flutter doing an IPO of its FanDuel subsidiary in the US also to capture some more value from the asset.

Flutter, which is headquartered in Clonskeagh in Dublin, made the genius move of buying the other big fantasy sports app, FanDuel and it is now Flutter’s trophy asset. But DraftKings’ share performance is so strong that investors have been pressuring Flutter to spin out FanDuel into a separate business. In March of this year, Flutter announced it would consider selling some of its FanDuel shares.