On November 13, 2025, FanDuel announced a bold move to expand its operations by launching sports event contracts in states where sports betting is not yet legal. This decision mirrors a similar strategy by DraftKings, one of FanDuel’s biggest competitors, aiming to capture an untapped segment of the market. During a third-quarter earnings call, Flutter CEO Peter Jackson revealed that FanDuel Predicts, a prediction market platform, is set to launch next month. This announcement comes shortly after Nevada regulators required the company to surrender its gaming licence due to its new venture into prediction markets.
FanDuel currently operates a single retail sportsbook in Nevada, located at the Fremont Hotel and Casino in Las Vegas, in partnership with Boyd Gaming. The company does not offer any online sports betting services in Nevada. The expansion into prediction markets will allow FanDuel to operate in the 11 states that have yet to legalize sports betting, including populous states such as California and Texas, which remain key targets for the company.
Despite facing regulatory challenges, Jackson underscored the importance of pursuing new markets. He emphasized that FanDuel Predicts would enable the company to access approximately half of the US population, which is currently underserved in terms of sports betting opportunities. By focusing on these untapped markets, FanDuel aims to establish a strong foothold in states that could potentially legalize sports betting in the future.
In the third quarter ending September 30, Flutter reported revenue of $3.79 billion, marking a 5% decrease compared to the same period last year and falling short of analysts’ expectations of $3.9 billion. The decline was attributed to favorable outcomes for customers in FanDuel’s sportsbook operations during the early games of the NFL season. Nevertheless, adjusted earnings per share significantly exceeded expectations, reaching $1.64 compared to an estimated $0.79. FanDuel also saw a 5% increase in the volume of sportsbook customers per month on average.
Despite the revenue dip, FanDuel maintained a dominant 38% market share in the US sportsbook market by gross gaming revenue and a slightly higher 41% share in net gaming revenue. Looking ahead, Flutter projects the total addressable market for US gambling to reach $63 billion by 2030, a forecast supported by industry analysts like those at Third Bridge, who cite the potential for new state openings and continued market expansion as key drivers.
In preparation for the launch of FanDuel Predicts, Flutter has earmarked an additional $40 million to $50 million in fourth-quarter EBITDA costs and plans to invest between $200 million to $300 million into the prediction market throughout 2026. This financial commitment follows Flutter’s August move to repurchase a 5% stake in FanDuel from Boyd Entertainment for $1.8 billion. Internationally, Flutter has also been expanding its presence in markets such as Brazil and Italy, although these investments have impacted available resources, leading to a 43% decrease in free cash flow year-to-date.
Moreover, Flutter’s strategic decisions have been influenced by regulatory changes abroad. The enactment of the Promotion and Regulation of Online Gaming Act in India resulted in the closure of real-money operations at Junglee, an Indian subsidiary acquired for approximately $200 million in 2021, a development Jackson expressed disappointment over.
In contrast, DraftKings CEO Jason Robins recently highlighted the potential of prediction markets as a promising opportunity for growth during an earnings call. While DraftKings has not provided a specific timeline for its launch, it is expected to follow FanDuel’s footsteps in the coming months. Earlier this year, Flutter entered into a partnership with CME Group to support its prediction market endeavors. Under this agreement, CME Group will receive 50% of the gross revenue from FanDuel Predicts, while FanDuel will handle all app-related costs. The deal underscores the growing interest and investment in prediction markets within the gambling sector, despite concerns about their impact on traditional sportsbooks.
Analysts like Jordan Bender from Citizens JMP see prediction markets as a substantial earnings driver for Flutter by 2027. However, not everyone is convinced. Some industry observers caution that the regulatory landscape remains uncertain, and the success of prediction markets will largely depend on the ability of companies like FanDuel to navigate these challenges effectively.
Flutter CEO Peter Jackson confirmed that FanDuel Predicts would not initially offer parlay betting options upon its launch. Instead, a pre-packaged offering is anticipated by early 2026. This strategic decision aligns with Flutter’s revised financial outlook, which now anticipates a full-year 2025 EBITDA ranging from $2.8 billion to $3.1 billion. Additionally, Flutter has adjusted its full-year revenue forecast to a range between $16.4 billion and $17.3 billion, partly due to the unfavorable sports outcomes earlier in the year.
In the stock market, Flutter’s shares fell 3.4% to $226 in pre-market trading on Thursday. Since peaking at over $300 per share in July, the company’s stock has experienced a nearly 25% decline, reflecting investor concerns over the company’s aggressive expansion strategies and the associated financial risks. As FanDuel and other industry players continue to explore new markets and innovate within the prediction market space, the company remains poised to capture significant opportunities in the evolving landscape of US gambling.
4.2/5
