Kenneth Dart’s growing investments in two of the world’s biggest gambling businesses have put the Cayman Islands-based investor at the centre of major developments in the international gaming industry.

Dart, who made Grand Cayman his home and established his global family office here, has built substantial positions in Flutter Entertainment, the owner of FanDuel, Paddy Power and Betfair, and Evolution, one of the world’s leading suppliers of online casino technology.

His investment in Evolution reached a significant milestone on 24 July when Candle Lake Limited, an investment vehicle he controls, increased its holding to just over 30% of the Swedish-listed company’s shares and voting rights.

The move illustrates the scale of an investment portfolio managed from Cayman that reaches some of the world’s biggest public companies. It also carries an immediate regulatory consequence.

Candle Lake acquired 2.05 million additional Evolution shares, taking the combined holding of it and related companies to 59.8 million shares, or approximately 30.02% of the company’s shares and votes.

Crossing the 30% level automatically triggered Sweden’s mandatory offer rules. Under the Swedish Act on Public Takeovers on the Stock Market, an investor who passes the threshold of 30% of the votes in a listed company must make a mandatory offer for the remaining shares or reduce its holding below the threshold.

Candle Lake therefore has four weeks from the 24 July acquisition to launch a mandatory takeover offer for the remaining Evolution shares or sell enough shares to bring its voting interest below 30%. Crossing the threshold does not mean Dart has decided to acquire Evolution outright; it requires Candle Lake to choose between making an offer and reducing its holding.

The development has also focused attention on Dart’s separate investment in Flutter, where entities associated with him disclosed an economic interest of about 28.9% in June.

The two investments are structured differently, however, and the Evolution transaction does not indicate that a similar move is planned at Flutter.

Swaps make Flutter position different

Candle Lake’s Evolution shares carry voting rights, which meant passing the 30% level triggered the Swedish mandatory offer provisions.

At Flutter, Dart-controlled entities disclosed about 18.8% of the voting rights in ordinary shares in June. A further 10.1% exposure was held through financial instruments, principally a cash-settled equity swap entered into by LBS Limited.

That distinction matters.

Cash-settled swaps can give an investor economic exposure to changes in a company’s share price without providing the voting rights that come with ownership of the underlying ordinary shares.

Dart’s total disclosed economic interest in Flutter therefore should not be treated as equivalent to a 28.9% voting stake.

His position nevertheless makes him one of Flutter’s most significant investors.

Flutter has expanded dramatically over the past decade, driven in particular by FanDuel in the U.S., but the company is now going through one of the more difficult periods of its recent history.

Last week, Flutter announced that chief executive Peter Jackson will step down after almost nine years in the role. Dan Taylor, currently the company’s president and chief executive of its international division, will become group chief executive on 1 October.

The leadership change came as Flutter again lowered its full-year outlook amid weaker performance in its U.S. business.

The company reported a second-quarter net loss of $296 million, compared with a $37 million profit in the same period a year earlier. It reduced its full-year revenue guidance by about $395 million to $17.9 billion and cut its adjusted earnings forecast.

Flutter shares fell sharply following the results, extending a steep decline this year.

The downturn has increased scrutiny of management’s strategy, particularly its decision to invest more heavily in attracting and retaining customers in the highly competitive U.S. market.

Jackson has defended that approach by drawing comparisons with Flutter’s earlier investment in FanDuel.

“In 2019 and 2020, for example, we continued to invest heavily in FanDuel at a time when many questioned the impact on near-term earnings,” Jackson told analysts, according to The Times.

Looking back, he said those investments proved to have been the right decision.

“We’re making the same decision today,” he said.

Not every investor is convinced.

Speaking to The Times, one Flutter shareholder questioned what the change in leadership meant for the company’s direction.

“The first thing I would expect is a strategic review,” the shareholder said. “For me, the message is not clear. If the strategy is the same, then why the regime change?”

Taylor will inherit a company that remains one of the biggest names in global online gambling but faces weaker U.S. sportsbook performance, increased competition and pressure to demonstrate that its latest investments will produce returns.

For Dart, the developments underline the scale of his exposure to the global gaming industry.

His disclosed economic interest approaching 29% in Flutter and the 30.02% voting position that triggered Sweden’s takeover rules at Evolution put substantial capital behind two of the most prominent companies in global online gaming.

What happens next at Evolution will be determined relatively quickly. Candle Lake must decide whether to make an offer for the shares it does not already own or reduce its position below Sweden’s mandatory offer threshold.

Flutter presents a different and potentially longer-term investment question as its incoming chief executive attempts to restore momentum and investor confidence.

For Cayman, the significance extends beyond the fortunes of either gambling company.

Dart established his global family office in Grand Cayman after making the island his home, and over more than three decades his interests have grown across industries and international markets. The Evolution and Flutter positions offer another illustration of the scale at which capital managed from the Cayman Islands can operate.

A decision by a Cayman-based investment vehicle controlled by Dart could now help determine the ownership of one of Europe’s largest online gaming technology companies. At the same time, one of Flutter’s most significant investors will be watching as a new chief executive attempts to revive the fortunes of a global betting business.

It is a distinctly Cayman connection to a contest playing out on a much bigger stage.