Flutter, the parent company of FanDuel, has disclosed fourth-quarter earnings that did not meet market expectations. Investors are increasingly concerned that emerging prediction markets are impacting the $14 billion sports gambling industry in the U.S.
The New York-listed company announced full-year revenue for 2025 reached $16.4 billion, a 17% increase from the previous year, but still lagging behind its latest prediction of $16.7 billion and prior estimates of $17.3 billion made in November.
Looking forward, Flutter anticipates revenue of $18.4 billion for 2026, which again falls short of the analysts’ consensus forecast of $19.3 billion based on data from Bloomberg.
There is growing speculation that prediction market platforms like Kalshi and Polymarket are siphoning off activity from traditional sportsbooks within the U.S. sports betting sector, which is estimated to be worth around $14 billion.
Competitor DraftKings has previously projected a revenue range for 2026 between $6.5 billion and $6.9 billion, which is below the analysts’ expectations of $7.2 billion. Both Flutter and DraftKings have experienced a significant decline in share value, with losses exceeding 50% over the past year.
Flutter’s CEO, Peter Jackson, attempted to downplay the potential threats, asserting that the company is “never complacent” and introducing a new loyalty program for FanDuel sportsbooks aimed at enhancing customer retention.
Jackson remarked that more targeted and personalized offers would help set their product apart from prediction markets, where promotional offerings can be more challenging to implement.
In a correspondence to shareholders, Flutter stated that the impact of prediction markets on its sportsbook growth will only be “in the low single-digit percentage points.”
The firm noted a slowdown in betting revenue for the three months leading up to December, attributing it to an atypical run of sports results that caused users to reduce their betting following short-term losses.
Prediction markets, which allow users to bet on binary outcomes of future events, gained recognition after accurately predicting Donald Trump as a contender in the 2024 U.S. presidential election.
These platforms claim that regulation through the Commodity Futures Trading Commission supersedes state-level gambling bans, a stance currently being contested by various states and Native American tribal groups, with potential implications for the Supreme Court.
Flutter introduced its own dedicated prediction product last December. Jackson noted that this offers an “incremental opportunity” to cater to customers in states where sports betting is not allowed, and he described overall prediction markets as “a win-win” for the company.