Flutter Entertainment believes it is positioned to benefit regardless of the outcome of the escalating legal fight over prediction markets, giving FanDuel's parent multiple paths to capitalize on an industry that continues reshaping U.S. gaming.
- Flutter CEO Peter Jackson believes the company is positioned for “good or great” outcomes regardless of how the prediction market legal fight is resolved.
- Flutter is pursuing prediction market growth through customer acquisition and market-making, which executives believe could capture the majority of the ecosystem’s economics.
- Flutter expects approximately $50 million in prediction market-making revenue this year as FanDuel continues investing heavily in its broader U.S. business.
The rapidly evolving regulatory environment makes it difficult to predict exactly where prediction markets are headed, CEO Peter Jackson said during an Oppenheimer fireside chat Tuesday. He nevertheless expects the fundamental jurisdictional dispute between federal commodities oversight and state gaming regulation to eventually reach the U.S. Supreme Court.
Until that seemingly inevitable ruling, Jackson said Flutter is focused on two opportunities: using FanDuel Predicts to acquire customers in states where online sports betting isn't yet legal and generating revenue by providing liquidity to other prediction platforms through its market-making business.
That strategy gives Flutter a hedge against an uncertain legal environment, Jackson said. A favorable outcome for prediction markets would preserve access to customers in major states without legal sportsbooks. If the legal environment instead narrows their regulatory advantage, Jackson argued FanDuel's sportsbook is better positioned when the products compete on a level playing field.
“I've always stated that I think whatever happens, the outcomes are either good or great for us,” Jackson said.
Multiple prediction market paths
FanDuel Predicts gives Flutter access to customers in heavily populated states where online sports betting remains unavailable, including California and Texas. The company believes those relationships could eventually transition into its sportsbook if those jurisdictions legalize traditional wagering.
The prediction platform's development has been slower than Flutter initially hoped, CFO Rob Coldrake said during Tuesday’s event, but the company's product should become “more competitive” by year-end. Flutter is working to replicate the unified prediction market and sportsbook app that DraftKings launched earlier this year.
Flutter has also rapidly expanded its separate market-making operation, including its original partnership with CME Group. In June, FanDuel expanded the platform through Crypto.com’s CFTC-regulated exchange and clearinghouse, operating under the OG Prediction Markets brand.
Company executives believe Flutter's experience pricing complex, correlated sportsbook wagers can translate directly to prediction markets. Coldrake said the market-making operation has already become profitable and is scaling rapidly.
Though Flutter is projecting extensive adjusted EBITDA losses from its prediction market investments in 2026, the company expects approximately $50 million in market-making revenue this year. Flutter execs during last week's second-quarter earnings call maintained that the operation can scale with relatively little incremental investment, creating a second revenue stream independent of FanDuel Predicts' consumer-facing performance.
Jackson, who is set to leave Flutter next month after 13 years with the company, was emphatic Tuesday about its prediction market ambitions.
“I'd rather directly monetize it,” Jackson said of the company's pricing capabilities. “I think we can make very good returns on it.”
FanDuel investing despite profit pressure
The prediction market push comes as Flutter is accepting additional near-term financial pressure to strengthen FanDuel's U.S. position.
Flutter maintained its U.S. online sports betting and iGaming market share lead, but revenue fell 6% year over year to $1.68 billion in the second quarter. Sportsbook revenue declined 15%, while U.S. adjusted EBITDA fell 70% to $119 million. Flutter attributed the profitability decline partly to prediction market and new-state investments.
Flutter is also increasing sportsbook promotional spending and customer generosity after high sportsbook margins and less compelling NFL content contributed to customer churn late last year. Company officials told investors last week that the spending was a longer-term investment rather than an effort to maximize near-term EBITDA.
The broader competitive environment has further strengthened that incentive. With U.S. sports betting revenue growth slowing after years of rapid expansion, prediction markets have become an increasingly important new battlefront.
Rival DraftKings reported more than 600,000 customers on its prediction market platform through the beginning of August, with annualized prediction volume increasing nearly fivefold between April and July. Flutter did not disclose specific user figures during its earnings release.
Jackson, like his DraftKings counterparts, has maintained that Flutter sees “very limited” prediction market cannibalization in states with regulated sportsbooks. He has argued traditional sportsbooks maintain advantages through broader wagering menus and promotional generosity that prediction exchanges struggle to replicate.
Flutter is therefore preparing for prediction markets to survive legal challenges and expand its total addressable market while maintaining confidence in FanDuel if the legal landscape moves in the opposite direction. Through large-scale investments in both its upstart prediction market and established sportsbook, Flutter is already readying itself for either scenario.
“What we would like to see is clarity,” Jackson said. “Whatever happens, I think we're very well positioned.”
