Flutter is accelerating its push into prediction markets as the FanDuel parent grapples with weaker profitability, a slowing U.S. sports betting market, and the impending departure of longtime CEO Peter Jackson.
- Company continues to view prediction markets as "complementary" to regulated sportsbooks.
- FanDuel Predicts sports and novelty contracts will migrate to Crypto.com exchange.
- Working on unified app – that integrates sports betting and prediction market apps – prior to start of NFL season.
Executives told investors Wednesday that prediction markets remain a long-term growth opportunity capable of expanding, rather than replacing, traditional online sports betting. The company said it plans to deepen its FanDuel Predicts offering ahead of the NFL season, expand its one-app strategy, and build a new revenue stream through market-making services while continuing to invest heavily in its core sportsbook business despite the near-term hit to earnings.
The strategy comes as Flutter reported second-quarter results that reflected growing financial pressure from both the increased investment and a “more challenging” operating environment.
Overall corporate revenue rose 3% year over year, but adjusted EBITDA fell 45% as the company absorbed higher UK gaming taxes while stepping up spending on prediction markets and World Cup marketing. Flutter posted a net loss of $296 million compared with net income of $37 million a year earlier.
The company also lowered its overall midpoint adjusted EBITDA guidance by $210 million, a more than 7% reduction.
Flutter's U.S. business, its biggest growth driver in recent years, continued to face pressure during the second quarter as revenue fell 6% from Q2 2025, reflecting “customer-friendly sports outcomes” that weighed on sportsbook hold despite strong engagement during the NBA Finals and World Cup. Year-over-year adjusted EBITDA dropped roughly 44%.
Management said it continues to prioritize strategic investments, including prediction markets, while working toward reducing leverage through stronger second-half cash generation and an expanded multi-year cost transformation program.
“We recognize that this weighs on near-term earnings, but we're convinced it's the right thing to do to maximize long-term shareholder value,” Jackson said.
Corporate changes
The earnings release also marked the beginning of a leadership transition.
Jackson announced he will step down at the end of September after nearly nine years as the company’s chief executive, handing leadership to Dan Taylor, CEO of Flutter’s International Division. Jackson said Flutter has historically created shareholder value by investing through periods when near-term earnings suffered, citing FanDuel investments made in 2019 and 2020 as an example of a strategy that ultimately strengthened the business.
“We're making the same type of decision again today,” Jackson said, arguing that increased investment in FanDuel's sportsbook and iGaming products would better position the company for future growth despite the drag on short-term profitability.
That philosophy now extends to prediction markets.
Jackson said Flutter continues to view prediction markets as “complementary” to regulated sportsbooks, telling investors the company has seen only limited cannibalization among existing sportsbook customers. The platform has also reached consumers in states including California and Texas where sports betting has yet to be legalized.
“We continue to see prediction markets as incremental to sports betting and iGaming, growing the overall market by capturing new demand,” Jackson said.
A central piece of that strategy is integrating Crypto.com into the platform. The company said all FanDuel Predicts sports and novelty contracts will migrate to Crypto.com's exchange while customers retain access to CME's financial markets.
Executives said the arrangement should allow new products to launch more quickly before the NFL season while improving the overall customer experience. The company is also working on a unified, nationwide app that integrates both its sports betting and prediction market platforms ahead of the lucrative football season.
Market making potential
Flutter also sees another opportunity beyond consumer-facing products.
Executives said the company is leveraging years of sportsbook pricing and risk-management expertise to become a market maker across prediction-market platforms, expecting roughly $50 million in market-making revenue during 2026.
Chief Financial Officer Rob Coldrake said growing trading volumes have increased management's confidence that market making could become a meaningful long-term, high-margin business.
“Our ambition here ... is to establish a leading position in this space by leveraging the pricing and risk management and the trading capabilities that we've got developed over the years with our sportsbook,” Coldrake said, “and we feel that we’ve got a real advantage in pricing complex and correlated markets.”
Management maintained that traditional sportsbooks continue to perform well when marquee sporting events drive customer engagement.
Jackson said FanDuel experienced record engagement during both the NBA Finals and FIFA World Cup, reactivating 2.3 million customers during the tournament while continuing to see only low-single-digit cannibalization from prediction markets.
Executives argued those results reinforce their belief that sportsbooks and prediction markets can coexist, with prediction markets serving as an additional customer acquisition channel rather than replacing traditional wagering.
Prediction market overview
Flutter's comments come as prediction markets remain one of the gambling industry's fastest-growing and most contested sectors.
The industry's expansion has unfolded alongside ongoing litigation over the Commodity Futures Trading Commission's authority to oversee sports event contracts. Executives noted Wednesday that broader regulatory questions surrounding prediction markets are ultimately expected to be resolved by the U.S. Supreme Court.
FanDuel, as well as fellow sportsbooks-turned-prediction market operators DraftKings and Fanatics, are competing with Kalshi, Polymarket, and a growing number of companies in the space.
Despite lowering full-year adjusted EBITDA guidance to reflect increased customer investment, management said the additional spending is intended to strengthen FanDuel's competitive position before football season and position the company for renewed market share gains beyond 2026.
“We want to invest behind the momentum we're seeing at the moment,” Jackson said. “This is a proactive decision that we're making around the longer-term U.S. opportunity.”
