Flutter doubles down on prediction markets despite investor worries about growth

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Flutter Leisure is leaning more durable into prediction markets, whilst some traders query how a lot upside the transfer will actually ship.

In its fourth quarter earnings letter to shareholders, the mother or father firm of FanDuel made clear that it plans to step up spending on its new prediction markets product this yr. The corporate mentioned: “We imagine this new product allows us to harness a big and incremental enlargement of the US addressable market forward of additional state regulation – an area the place our scale and expertise give us a pure benefit It expects a rise in prediction markets funding with adjusted EBITDA loss anticipated to be towards the highest of beforehand guided vary of $200 million to $300 million. In different phrases, earnings will take a near-term hit as Flutter builds out the enterprise.

Flutter basically confirms an affiliated prediction market buying and selling arm is on the best way. pic.twitter.com/2W3DfFIDwd

— Dan Bernstein (@dan_bernstein_) February 26, 2026

Administration framed that spending as deliberate. The corporate is positioning prediction markets as a protracted vary development driver, not a aspect experiment, and seems keen to soak up quick time period dilution to determine a foothold.

Why Flutter sees upside with prediction markets, not erosion

One of many greatest considerations hanging over the sector is whether or not prediction markets will siphon exercise away from conventional on-line sportsbooks. If prospects shift {dollars} from sports activities betting into occasion contracts, the web impact could possibly be much less thrilling than the headline development suggests.

Flutter chief government Peter Jackson sought to tamp down that narrative. “We have now not recognized any proof of any significant impression,” he mentioned, referring to fears that prediction markets are consuming into FanDuel’s sportsbook enterprise.

The corporate pointed to an inside evaluation to again that up. In response to Flutter, the evaluation drew on trade channel checks, third-party knowledge evaluation of deposits, actives, and app obtain developments, and detailed evaluation of FanDuel buyer developments, and located that any deal with impact possible sits in “the low single digits proportion factors.” It additionally careworn that prediction markets have “not been a big driver of the moderating buyer and deal with developments we’ve got noticed.”

Flutter can be drawing consideration to efficiency in newly opened states to help its case that demand stays robust. In Missouri, for instance, person development outpaced what executives had modeled. The corporate mentioned acquisitions there “have been properly forward of expectations, reaching 5% of the inhabitants inside the first 30 days, making Missouri one in every of our greatest state launches up to now.”

Taken collectively, Flutter argues that prediction markets usually are not hollowing out its sportsbook, as a substitute describing them as “a big incremental development alternative,” and goes a step additional by suggesting that “the emergence of prediction markets will speed up the trail to state regulation of on-line sports activities betting and iGaming.”

Contained in the FanDuel Predicts rollout

FanDuel has already rolled out FanDuel Predicts, a standalone app in-built partnership with CME Group, one of many largest derivatives exchanges on the earth.

The app started its launch in late 2025 and has been expanding across the country in phases. Customers can commerce contracts tied to sports activities outcomes, in addition to take positions linked to main monetary benchmarks such because the S&P 500 and Nasdaq-100, commodities together with oil and gold, and macroeconomic indicators like CPI and GDP.

Our This autumn and Full 12 months 2025 Earnings replicate the energy of our international portfolio and some great benefits of the Flutter Edge.

2025 highlights:

• 15.9M AMPs, up 14% YoY
• $16.4B income, rising 17% YoY
• $2.8B Adjusted EBITDA, up +21% YoY
• @FanDuel #1 in US OSB and iGaming… pic.twitter.com/z2ScTt4wFu

— Flutter Leisure (@FlutterEnt) February 26, 2026

Flutter says early utilization patterns are lining up with expectations. “The overwhelming majority of the exercise targeted on sports activities, and common quantity per buyer [is] in keeping with expectations,” the corporate advised traders.

Executives see main sporting occasions as pure catalysts for additional adoption. Improvement plans are geared towards the 2026 FIFA World Cup and the beginning of the 2026/27 NFL season, two tentpole moments that would carry new customers into the product.

Rival DraftKings can be working with CME by itself prediction markets providing. The parallel strikes reiterate how significantly the main US operators are taking this class. What began as a distinct segment nook of the market now appears to be like like an rising aggressive entrance.

Flutter’s normal thesis rests on enlargement slightly than substitution. The corporate describes prediction markets as “TAM expansive” or “Whole Addressable Market expansive,” arguing that they open the door to prospects who can’t legally entry conventional on-line sportsbooks. Roughly 40 % of the US inhabitants lives in states with out regulated on-line sports activities betting, and Flutter believes occasion contracts might attain a few of these shoppers. It additionally sees potential to draw new sports activities and entertainment-first prospects who could not have engaged with a sportsbook earlier than.

Past distribution, Flutter thinks it has an operational edge. The corporate says it’s “uniquely positioned to cost advanced, correlated markets in actual time,” and has signaled curiosity in utilizing its proprietary fashions to offer market making providers, which might lengthen its experience in odds setting into a brand new however associated area.

Flutter Leisure’s monetary pressures and the 2026 roadmap

The prediction markets push is unfolding in opposition to a extra difficult monetary backdrop.

Financial institution of America analysts recently downgraded both DraftKings and Flutter, citing prediction markets amongst a number of headwinds. The financial institution lowered Flutter’s worth goal from $325 to $250, arguing that even when cannibalization stays restricted, the added competitors and margin volatility might weigh on the sector.

On the similar time, operators are contending with shifting tax regimes and uneven sportsbook margins in key states. This has made traders extra delicate to any new initiative that requires heavy upfront spending.

Flutter has additionally been reshaping elements of its group. Round 250 roles are being eliminated in Leeds in the UK as the corporate consolidates expertise platforms and adjusts to regulatory and value pressures in Europe. Earlier quarterly outcomes confirmed revenue growth but also included a sizable net loss within the third quarter of 2025, pushed partly by impairments and market entry prices.

In opposition to that backdrop, administration is asking shareholders to deal with the lengthy recreation. For 2026, the corporate signaled that steering assumes adjusted EBITDA funding close to the highest of the beforehand outlined $200 million to $300 million vary. It additionally indicated that buyer engagement from prediction markets is prone to skew towards the again half of the yr.

The message from the highest is: “Our precedence is to construct worth for the long run, whereas additionally sustaining the pliability to speed up funding. We imagine this may place FanDuel to ship future development and harness the long-term alternatives for our enterprise.” For now, Flutter is betting that persistence will repay.

Featured picture: Flutter Leisure

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