FanDuel parent Flutter could launch sports predictions before the end of this year, according to analysts recapping meetings from last week’s Global Gaming Expo.
The NYSE-traded international gaming operator signed a deal in August with CME Group to launch new predictions products and “expand access to financial markets for millions of FanDuel customers.” Whether the deal included the possibility of sports predictions was not mentioned in the release.
Now, despite warnings from regulators, the FanDuel parent seems ready to launch by the end of the year.
“Importantly, FLUT stated it’s likely to launch sports contracts with CME Group as soon as by the end of this year and has factored potential repercussions,” Barry Jonas of Truist said.
Predictions a ‘net good, or net great’ for FanDuel
Flutter CEO Peter Jackson said predictions will either be a “net good, or net great” for the company, according to Jeffrey Stantial of Stifel. That’s notable given his “historically balanced/honest perspective,” Stantial added.
Exchanges are nothing new to Flutter given its Betfair ownership. While a lot of the conversation about predictions has focused on not having enough parlays and props to compete with sportsbooks, Flutter management noted another real issue is the lack of generosity. Without bonus bets and deposit matches, prediction platforms will struggle to be competitive with traditional sportsbooks even at maturity, management told Stantial.
Flutter management also said volume metrics are misleading, noting $1.5 billion in trading volume on the US presidential election led to just $8 million in revenue.
Still, Flutter’s thinking on predictions has seemingly evolved quickly since its August transaction.
“While the CME partnership was originally intended for more novelty-type markets primarily as a customer acquisition tool, management now sees a path to offering sports prediction markets in some states potentially following quickly after product launch,” Stantial said.
