The higher FanDuel marketing costs planned for the second half might create some noise around earnings, but its parent company has found success multiple times with a similar playbook internationally.
That is according to Jeffrey Stantial of Stifel, who compared the current situation to two other examples at Flutter where business improved after the company consciously increased spending on customer acquisition and promotions.
Stantial has a buy rating on FanDuel‘s parent stock with a $133 price target. The stock is down nearly 55% since the beginning of 2026 through Tuesday’s close. FLUT hit a 52-week low of $92.91 after its Q2 earnings announcement in early August, when the company lowered guidance to account for increased promotional spending.
“FLUT remains an execution story, though risk/reward skews attractive, in our view, with several potential catalysts for sentiment improvement in the coming months including [FanDue] share stabilization, U.S. OSB [total addressable market] re-acceleration, and potential predictions legal clarity,” Stantial said.
Why has FanDuel share dropped?
FanDuel’s leading sports betting market share has been declining since early 2025. Stantial pointed to a variety of reasons, including product improvements from bet365, DraftKings and Fanatics, as well as FanDuel’s mishandling of promotions during the fourth quarter last year.
“It’s fair to say we didn’t execute our generosity strategy like we wanted to,” Jackson said at the time. “We should’ve pushed harder.”
Flutter made multiple management changes following the news and cut FanDuel’s EBITDA forecast to account for increased promotional spending in the second half.
“The US leadership team changes implemented in H1 are designed to ensure we are positioned to deliver improved performance through a more competitive customer-led proposition,” Jackson wrote to shareholders in August. “Crucially, the encouraging signs we now see in our performance give us the confidence to increase investment in customer acquisition and retention.”
DraftKings still running
DraftKings is not making it easy to close any gaps.
Its big marketing push for the NFL season began Wednesday with DraftKings Gameday, a one-day promotional event that aims to acquire new customers and reactivate football-focused bettors a week before kickoff.
The promotions run across all of DraftKings’ platforms as well as gas giveaways in four of its most important states for sports predictions: California, Florida, Georgia and Texas.
Over the last month, DraftKings downloads are up around 25% compared to the same period last year, according to SensorTower data quoted by Stifel. FanDuel, meanwhile, was down nearly 50%.
Flutter has done this before
Stantial pointed to two significant periods in Flutter’s history when increased spending ultimately led to a healthier business.
Flutter increased its promotional reinvestment in both fiscal 2017 and fiscal 2018 to “take advantage of potential disruptions” from consolidation in the market. The result was adjusted EBITDA growing more than 50% in fiscal 2019 compared to fiscal 2017, when accounting for tax changes at the time.
Flutter also poured money into the Paddy Power and Betfair brands in the United Kingdom. The investments reversed a decline in market share and generated a 45% cash-on-cash return.
Higher FanDuel costs could be permanent
FanDuel plans to spend $385 million on marketing in the second half. While such a high level of reinvestment is unlikely to continue, Stantial said investors should be prepared for FanDuel to raise the floor on its spending.
“While there is concern this could lead to another round of near-term estimate cuts, even if long-term accretive, we believe Consensus [forecasts] already conservatively factors potential for continued investment into OSB engagement promos and PM user acquisition spend in FY27E,” Stantial added.
