When analysts peppered Flutter CEO Peter Jackson with questions on last week’s earnings call, the queries predictably centred on the company’s near-term outlook for its prediction market division.
A rapidly expanding asset class, prediction markets by some forecasts are poised to top $1 trillion in annual revenue by 2030. The meteoric rise could be viewed as stunning, considering that event contracts on sports – which drive a majority of prediction market volume most days – were still in a formative stage at this point last year.
Less than three months after the launch of FanDuel Predicts, Jackson addressed mounting questions associated with cannibalisation on his quarterly call with gaming industry analysts.
“As you’d expect, we’ve undertaken a comprehensive review and found no evidence of material cannibalisation on our existing business,” Jackson told analysts in reference to declining sports handle. “The opportunity across prediction markets is certainly far bigger than any potential cannibalisation of existing sports.”
The largest sell-off in sports betting stocks in four years suggests otherwise. Flutter, the parent company of FanDuel, plunged as much as 15% following the call, dropping the share price to its lowest level since May 2022. Over the last 12 months, Flutter sank approximately 54%, a downturn that accelerated after heavyweight operators like DraftKings entered the prediction market space.
Amid the explosion in prediction markets, both companies are trading near four-year lows. Flutter is now approaching May 2022 levels of $96 per share when global inflation concerns battered the industry.
Flutter closed on Friday at $106.14 per share, down 13.8% for the session. The company ended February down 36.8% for the month, in line with double-digit declines across the industry. Last August, Flutter traded at $309 a share, the company’s highest level since its 2024 debut on the New York Stock Exchange.
The downward trajectory at Flutter mirrors a comparable regression at DraftKings, which has also been walloped by the rise of event contracts. As with DraftKings, Flutter plans to invest heavily in prediction markets this year.
Changing landscape for prediction markets
The investment analysts, who joined the earnings call from continents around the world, framed a large portion of their questions around Flutter’s plans for prediction market expansion. At least seven analysts addressed the asset class in their queries.
In many respects, Jackson echoed the sentiments of DraftKings counterpart Jason Robins on the considerable opportunity presented through the asset class. During an earnings call last month, Robins described the market as the most intriguing “growth opportunity” for the sports betting industry since the historic PASPA decision in 2018.
In a similar vein, Jackson identified prediction markets as the “most valuable long-term opportunity” in the US sports wagering industry, with the potential for significant upside in the coming years.
Moreover, Jackson believes Flutter can capitalise on significant cross-sell opportunities between FanDuel Predicts and other segments such as sports betting and iGaming. When asked by John DeCree of CBRE Securities if prediction markets will accelerate the pace of legalisation in non-gaming states, Jackson told the analyst that he is “singing to the choir”.
“We believe the noise around prediction markets, it is an opportunity for us to acquire customers in advance of the states regulating,” Jackson said. “We do think it will help hasten the regulation of iGaming and online sports betting.”
Flutter-ing in turbulent conditions
For fiscal year 2026, Flutter estimates it will invest at least $250 million to grow FanDuel Predicts. The investment could be even higher if the returns outperform expectations, according to Chief Financial Officer Rob Coldrake. The company projects to spend in the range of $250 million to $300 million, with the majority of the spending in the second half, Truist Securities analyst Barry Jonas wrote in a research note.
In addition, Jonas noted that Flutter is actively pursuing options to leverage its proprietary pricing capabilities within its predictions space. Unlike DraftKings, however, Flutter has not provided assurances that it will launch a proprietary market-making service. In addressing the topic, Flutter only indicated that the company is weighing options to add a market-making arm.
DraftKings has stated definitively that it will launch a service, one that will likely provide the company with millions in annual revenue from trading fees.
Jonas identified some other lingering concerns. Flutter anticipates 2026 revenue of $18.4 billion translating to adjusted EBITDA of $2.97 billion at the midpoint. While both projections are considerably below Wall Street estimates, the outlook on EBITDA is 15% below analyst forecasts for the year.
The transition to prediction markets has prompted analysts to question whether leading online gaming companies will see attrition on the sportsbook side.
During the fourth quarter of 2025, FanDuel reported handle growth of 3% year-over-year, which lagged behind expectations. FanDuel blamed the subdued performance in last year’s final quarter and the start of 2026 on abnormal results in the NFL season. For instance, the Kansas City Chiefs, Baltimore Ravens and Cincinnati Bengals all missed the playoffs, depriving bettors of parlay opportunities on star players such as Patrick Mahomes, Lamar Jackson and Joe Burrow.
Prediction markets depress valuations
Other analysts focused on prediction markets in their commentary last week. Citizens analyst Jordan Bender cited ambiguities with prediction market growth for broader uncertainties on the company’s revenue outlook. While Bender believes there is no upside to prediction market revenue in the outlook, it is still likely that Flutter baked a cushion into the guidance, according to his note.
Conversely, Macquarie analyst Chad Beynon wrote that any sell-off related to predictions is overdone, offset by Flutter’s standing as the market leader in US sports betting. Over the next two years, Beynon still projects compounded annual growth rates of 10% and 21% for revenue and adjusted EBITDA at Flutter.
For the better part of a decade, FanDuel and DraftKings have maintained a practical duopoly on the US online sports betting market. Since PASPA, the two companies have commanded a combined market share that consistently eclipses 70%.
But a crowded marketplace for prediction markets has led to questions of whether their supremacy is fading.
Matt Rybaltowski
Matt is primarily responsible for long-form feature coverage on complex sports betting scandals. He also provides coverage on finance, M&A and other technological developments.
Original article: https://igamingbusiness.com/sports-betting/online-sports-betting/flutter-jackson-downplays-prediction-market-effect/
