Published on: October 17, 2025, 12:27h.
Updated on: October 17, 2025, 12:27h.
- Operators facing challenges to fully capitalize on the NFL season
- Analysts caution on lowered 2026 estimates if Q4 disappoints
- Current hold in New York for the quarter stands at 8.6%, below previous three quarters
Market predictions have exerted pressure on sports betting stocks such as DraftKings (NASDAQ: DKNG) and Flutter Entertainment (NYSE: FLUT), as operators navigate a challenging start to the 2025 NFL season. Analysts are starting to refocus on predictions for Q4 holds.
In a recent note to clients, Macquarie analyst Chad Beynon emphasized that whether online sports betting firms will be able to fully leverage Q4 benefits derived from the NFL is a significant question as we approach third-quarter earnings reports. This query is vital as some analysts have observed that disappointments in customer outcomes during the NFL could negatively impact DraftKings’ and Flutter’s third-quarter earnings, mirroring issues encountered in last year’s Q4 earnings.
Beynon states, “Should Q4 2025 reflect another disappointing NFL hold, we foresee a downshift in future hold expectations for Q4 NFL, along with possible downgrades in 2026 consensus estimates, and a more cautious outlook from management.”
He maintains “outperform” ratings for both DraftKings and Flutter, with target prices set at $52 and $330, respectively. These targets indicate potential upside of 42% for DraftKings and 32% for Flutter as of their closing prices on Thursday, October 16.
Potential Overestimation of DraftKings and FanDuel Hold Rates
September usually represents a crucial month for operators as its betting activity accounts for nearly half of Q3 handles, and preliminary analysis suggests that DraftKings and Flutter’s EBITDA may be adversely affected.
Beynon highlights that while DraftKings and Flutter initially estimated their structural holds for Q4 at 11% and 13% respectively, recent trends suggest they might struggle to meet these projections. He notes that in the past two years, Q4 structural hold rates have underperformed by an average of 200 basis points.
Beynon further reveals, “The current Q4 2025E EBITDA consensus for DKNG and FLUT is anticipated to be $396 million and $570 million (+343% and +250% year-over-year), which presupposes gross hold rates of 10.0% and 11.2%, alongside net hold rates of 7.6% and 8.8%, respectively.” He notes that historically, DKNG and FLUT have averaged Q4 net hold rates of 5.7% and 6.9% over the last two years.
He mentions that in the early part of the current quarter, the average hold rate in New York, the nation’s largest sports betting market, is approximately 8.6%, falling short of the benchmarks set in the past three quarters.
Opportunity Amid Prediction Market Struggles
The recent spike in football event contract volume on prediction platforms like Kalshi has been a notable stressor for sports betting stocks, particularly affecting DraftKings and Flutter negatively.
Citing insights from industry discussions at the recent Global Gaming Expo (G2E) in Las Vegas, Beynon posits that the recent sell-off might be overreacted, presenting potential investment opportunities in stocks like DraftKings and Flutter.
“We believe that robust September online sports betting volume and positive feedback during the third-quarter earnings calls could emerge as short-term catalysts for Online share prices, alleviating investor concerns. Coupled with strong NFL hold rates in Q4 and ongoing significant growth in iCasino, we anticipate DKNG and FLUT share prices could recover to their August levels by year’s end (+36% and +23% respectively from current positions),” the analyst concludes.