FanDuel sees signs U.S. sports betting could grow faster than it expects this football season after finding success with its revamped promotional strategy during a uniquely compelling summer of sports.
Flutter Entertainment’s lowered second-half outlook assumes about 5% year-over-year growth in US online sports betting revenue, CEO Peter Jackson revealed Tuesday.
“Would I tend to take the over on that at the moment? Yeah, probably, but we want to be conservative,” Jackson said during a fireside chat with Oppenheimer.
Revenue had been growing at close to double-digit rates through the first five months of the year before June brought that rate closer to 5%, amid bettor friendly outcomes during most-watched NBA playoffs in 30 years and America’s first World Cup on home soil in three decades, Jackson explained.
FanDuel revamp sees early returns
While the results weighed on net revenue, the unusually strong engagement provided encouraging early returns on FanDuel’s increased investment in promotions and customer incentives, an approach it plans to carry into football season.
That shift comes after management acknowledged they pulled back too far on generosity last year amid unusually high sportsbook win rates and what Jackson described as a less compelling NFL season from a “content” standpoint. The struggles came amid an industrywide slowdown that produced the first year-over-year declines in US sports betting handle since states began reporting that information.
Flutter shares have fallen more than 55% this year amid FanDuel’s market-share losses and a leadership overhaul that included longtime FanDuel CEO Amy Howe stepping down in May and Jackson announcing plans to step down last week.
FanDuel tailors promotions to sports
FanDuel is increasingly tailoring promotions to create more winning experiences during stretches of higher sportsbook win rates.
During the World Cup, FanDuel ran a goals promotion around games where it expected significant scoring, giving customers opportunities to win early in the tournament. It also tailored its soccer product to U.S. betting habits, with Americans showing greater interest in markets that include extra time than European bettors, who typically focus on regulation, Jackson said.
CFO Rob Coldrake said FanDuel’s sports and finance teams are working together to optimize that strategy, including studying how customer activity changes as net win margins rise.
FanDuel plans to run promotional generosity at roughly 6% of handle in the second half, with some of that increased investment potentially carrying into 2027.
“I think it’s sensible to assume that we continue investing into 2027,” Coldrake said, adding that the elevated spending would not continue “in perpetuity.”
$50 million market making target
Flutter continues to approach prediction markets through both its consumer-facing exchange and market making, using its sportsbook pricing and risk-management technology to generate additional revenue.
Flutter expects roughly $50 million in market-making revenue this year. Combination contracts, the prediction-market equivalent of high-margin parlays, present a particular opportunity because they require sufficient liquidity on the other side.
On the consumer side, Flutter is targeting a larger share of the market this football as it shifts FanDuel Predicts sports contracts from CME Group to Crypto.com. Jackson remains less concerned about prediction markets cannibalizing sportsbooks where the two compete directly, citing recent growth in FanDuel states and Betfair Exchange, which accounts for only a low-single-digit percentage of UK revenue despite operating alongside sportsbooks.
Jackson will step down as Flutter CEO and leave its board Sept. 30 after nearly nine years in the role. Flutter President and International CEO Dan Taylor takes over Oct. 1, with Jackson remaining as an adviser through the end of the year.
