FanDuel, the prominent online sportsbook operator in the United States, recently made a significant investment in a new office building in Beverly Hills, California, spending a notable $71 million on the property. The newly acquired building is a three-story, 50,200-square-foot space located at 9000 Wilshire Boulevard. This purchase, at a cost of $1,410 per square foot, signifies a substantial premium compared to the typical commercial real estate rates in Southern California.
Despite the hefty investment, the state of California currently does not permit online sports wagering or iGaming, and it is anticipated that this may not change for a significant amount of time. The office market in Los Angeles has been experiencing a period of sluggishness, with a shortage of leasing activity and increasing vacancy rates. However, there are some positive signs, such as an increase in government agencies leasing large office spaces in the region, according to research by Kidder Matthews.
It remains unclear how many employees FanDuel intends to have at the new Beverly Hills location. While there is hope that California will eventually legalize online sports wagering, it may take several years for this to come to fruition. Additionally, due to Tribal control of the state’s casino gaming industry, online casinos are unlikely to be permitted in California.
The establishment of the new office in Beverly Hills does not necessarily indicate that FanDuel will immediately begin offering betting services in the state. Some gaming companies have corporate offices in states where they do not offer betting services. For instance, DraftKings opened a new office in Las Vegas despite not offering daily fantasy sports or sports betting in Nevada.
The sale of the office building in Beverly Hills was a lucrative deal for the Swedish developer Skanska, the previous owner, who acquired the property in 2019 for $18.2 million. The sale to FanDuel for $71 million likely resulted in a substantial profit for Skanska. FanDuel has been profitable throughout 2023 and is expected to become the first U.S. sportsbook operator to accomplish this feat. The company’s parent firm, Flutter Entertainment, is also set to list its shares on the New York Stock Exchange later in the month.