Flutter Faces Sharp US Earnings Dip, Eyes Global Resilience

Picture an unstoppable NFL winning streak rewriting the fortunes of America’s biggest sportsbooks.

Flutter Entertainment—parent of FanDuel—just revealed a stunning $205m shortfall in anticipated 2024 earnings.

Imagine a windfall for bettors, but a serious dent in FanDuel’s bottom line and major recalculations for the entire industry.

Read on to discover how unstoppable NFL favorites, a thriving European sector, and evolving parlay strategies are redefining gaming profits.

Flutter’s High-Stakes Setback: Surging NFL Favorites Slash US Earnings by $205M

3 Key Points

1. Record NFL favorites hammered FanDuel’s margins, causing Flutter to cut US earnings projections by $205m.
2. Outside the US, Flutter reported surging growth, beating revenue and EBITDA guidance by up to 2%.
3. Focus on parlays and in-play betting intensifies, with average parlay legs exceeding five in the NFL season.

Flutter Entertainment, the parent of FanDuel, announced a major downward revision of its 2024 earnings forecast. This news emerged after American football bettors raked in bigger-than-expected wins, mostly due to an unprecedented run of NFL favorites claiming victory. That hot streak dented FanDuel’s top line, forcing the gaming behemoth to reassess revenue and profit projections.

The reported shortfall is stark. Flutter slashed its US revenue outlook by approximately $370m compared to the midpoint of earlier forecasts. Consequently, adjusted earnings for its American operations will sink from an expected $505m to a revised $300m—a loss of around $205m. Reacting to the announcement, Flutter’s US-listed stock dropped by 1.7% in extended trading.

FanDuel is hardly alone in this. The US sports betting industry has seen an explosion of enthusiastic bettors. Many states reported record handles this year, as confirmed by data from Legal Sports Reports. Combined, licensed sportsbooks across 33 markets achieved close to $150b in total wagers and over $14.2b in operator revenue. Although that marks a remarkable year-over-year surge, it also underscores just how quickly the tide can turn when heavily favored teams dominate.

Despite the gloom surrounding FanDuel’s US performance, Flutter’s business elsewhere soared. Preliminary numbers show that non-US revenue and EBITDA bested the company’s own guidance by 1% and 2%, respectively, for the quarter. That equates to a 6% outperformance against Q4 2024 market consensus. Strength in Europe, Asia, and other global markets thus partially mitigates the blow from FanDuel’s domestic slump.

CEO Axel Hefer stressed that the US market’s short-term disruption does not derail Flutter’s long-term ambitions. Last September, Flutter projected that a booming US sports betting market could represent half its profit by 2027. However, 2024’s NFL-heavy fiasco demonstrates how reliant operator margins can be on luck and the unpredictability of sports outcomes.

Beyond the immediate hit, insiders are already eyeing 2025 growth patterns. Experts like Jordan Bender at JMP Securities caution that US sports betting’s handle growth will likely moderate. Missouri is the only state expected to legalize sports betting this year, while Canada’s Alberta might follow in 2025. With fewer new states opening, operators must optimize promotional spend and revenue strategies for existing markets.

One emerging solution is the accent on in-play betting. These live wagers allow fans to place bets during ongoing games, potentially leading to deeper engagement and higher average spend. Another is the push toward parlays. Operators like FanDuel and DraftKings promote multi-leg parlays, encouraging players to add more legs. This trend not only boosts potential revenue per ticket but also capitalizes on a gambler’s love for big-payout scenarios.

Meanwhile, DraftKings remains FanDuel’s closest rival, collectively comprising 65% of the US sports betting market. DraftKings secured about $4.67b in revenue on $49.4b in wagers across 26 markets, while FanDuel reported a bigger share in fewer states. Both companies have leveraged their daily fantasy sports roots for user acquisition, which so far has kept them on top, despite intensifying competition.

All told, Flutter’s US challenges serve as a stark reminder: in sports betting, luck can cut two ways. While the unstoppable streak of NFL favorites has thrilled bettors, it has also forced market leaders to recalibrate. Even so, Flutter is betting on the bigger picture. As in-play options grow, parlay bets multiply, and new technology refines margins, the company believes that short-term hiccups will not upset its robust strategic plan.

While Flutter endures a painful blow from an unprecedented run of NFL favorites, it sees these troubles as ephemeral. Bolstered by an uplifting performance outside the US, the group remains confident about its future in a more stable, tech-savvy sports betting arena. The emergence of in-play betting, advanced parlay methods, and further state-level expansion might just restore the balance, proving that, over time, the house can still win.