FanDuel’s parent company is looking to spend hundreds of millions on its nascent prediction market platform, underscoring the U.S. sports betting leader’s investment in the industry.
- FanDuel’s parent company projects up to $300 million in adjusted EBITDA losses in 2026 as it heavily invests in its prediction market platform.
- Major sportsbook operators have launched prediction markets amid legal uncertainty and rising competition, though executives report minimal current impact on sportsbook handle.
- Despite projected growth in sports event contracts, shareholder concerns over competition and slowing handle growth have driven significant stock declines.
FanDuel announced it was projecting to lose as much as $300 million in adjusted EBITDA in 2026. This would translate to hundreds of millions of dollars in financial losses over the rest of the calendar year.
The company spent roughly $40 million around the launch of FanDuel Predicts in December 2025, company officials said during an earnings call Thursday.
Speaking during Flutter’s earnings call Thursday, CFO Rob Coldrake said he would be “delighted” if the prediction market spend neared or eclipsed the $300-million mark. He said this would indicate the company was seeing a return on investment that justified the continued spending.
Prediction market battle heats up
The latest spending projection comes as the state-regulated gaming industry sees increasing pressure from prediction markets.
Since exploding into the national consciousness around the 2025 Super Bowl, sports event contracts have produced billions of dollars in trading volume. For U.S. leaders such as Kalshi, sports generate around 90% of all trades placed.
With their legality in question, the major U.S. sports betting operators were initially hesitant to launch their own prediction market platforms, but they reversed course late last year. FanDuel, the No. 1 sports betting operator by gross gaming revenue share, as well as No. 2 DraftKings and No. 3 Fanatics, launched their respective prediction market offerings in December.
Sports event contracts are currently not subject to state gaming regulations and are instead regulated federally, a position that has been challenged in courtrooms in roughly a dozen states. Even with its legality unsettled, prediction markets’ existence has helped drop the stocks of both FanDuel and DraftKings as shareholders worry whether the established companies can keep up with a growing number of competitors.
FanDuel "has not identified any evidence of any meaningful impact" on prediction market cannibalization, per $FLUT earnings release; Flutter estimates potential handle impact growth to be in the low single digits
— Ryan Butler (@ButlerBets) February 26, 2026
Despite industry fears, officials from FanDuel on Thursday and DraftKings earlier this month said on their respective earnings calls that they were seeing negligible impacts from prediction markets on their sportsbooks.
FanDuel projected in its earnings release that sports event contracts had a “low single-digit” impact on handle. In Missouri, the nation’s most recent sports betting launch, FanDuel saw one of its “best launches ever” with customer acquisition trends “well ahead of expectations.”
But shareholders’ fears have not been dissuaded, leading to both FanDuel and DraftKings seeing their stock prices drop more than 50% in the past 12 months. Both U.S. market share leaders saw roughly double-digit drops in after-hours trading following their respective earnings announcements.
Handle drop raises questions
FanDuel’s slowing handle growth has not stopped this narrative.
The company attributed a worse-than-expected 3% growth in handle in part to “less compelling” NFL matchups to end the most recent regular season and playoffs. The company said it had to reapproach its loyalty program and free bet promotional strategy after “bookmaker-friendly” results led to less money available for customers to place bets.
But that hasn’t stalled the narrative that prediction markets present a growth threat to regulated sportsbook operators’ bottom lines. These companies have had little choice but to respond by investing heavily in prediction markets of their own.
Flutter CEO Peter Jackson wrote in the company’s earnings announcement that he expected FanDuel Predicts’ volume to ramp up in the second half of 2026. He argued Flutter’s long-term success running its BetFair exchange platform in Europe as well as its established technology advantages positioned it to stand out in the sports event contract space.
“We believe this will position FanDuel to deliver future growth and harness the long-term opportunities for our business,” Jackson wrote.
It remains to be seen how, or if, FanDuel can compete with a growing and increasingly competitive prediction market field. In the eyes of shareholders, this has become a pivotal question around the company’s valuation.
