Flutter ‘under pressure,’ J.P. Morgan analyst says
Shares of Flutter Entertainment, corporate parent of FanDuel, remain “under pressure,” according to J.P. Morgan analyst Estelle Weingrod. She offered this view in a 30 January investor note that marked the inception of J.P. Morgan coverage of Flutter.
Weingrod blamed the pressure on uncertainty and concern over slowing handle growth for Flutter products. Queried the analyst, “is it self-induced?” She also wondered whether strong online sports betting hold in November and December had left bettors short on liquidity. Prediction markets also were raised as a possible cause, potentially making inroads into FanDuel territory.
Those potent two months of OSB hold inspired Weingrod to raise her fourth-quarter cash-flow projection for Flutter 6.5% to US$341 million. Wall Street’s consensus forecast was US$330 million.
However, Weingrod moved to “lower our outer year estimates to reflect the potential for slowing handle growth.” She wrote that FanDuel had a “compelling revenue trajectory” but that she lacked conviction on how its handle, hold percentage, and promotions would perform over the coming year and beyond.
Handle growth had slowed noticeably in the final trimester of 2025, Weingrod noted, blaming less-compelling NFL matchups and fewer games on the slate. She added, “it is yet to be seen whether or not sports books are losing market share to prediction markets.”
Igaming, at least, was an unmitigated bright spot for FanDuel, with 31% revenue growth, compared to the 22% of the rest of the market. Weingrod forecast US$573 million in fourth-quarter igaming revenue, down from US$630 million. The latter number had been predicated on a 41% growth rate.
Weingrod pointed toward the upcoming fourth-quarter-earnings call for management clarification regarding the rollout of FanDuel’s prediction-market product. She also hoped for commentary on Flutter’s comfort level with its 2027 revenue guidance and the promotional environment. The rise of event contracts and changes in taxation levels in the United States, she added, could be factors.
Despite forecasting fourth-quarter revenues in excess of US$2.2 billion, Weingrod opined that gross margins were an X factor and that J.P. Morgan’s guidance could prove to be conservative, given powerful end-of-year hold percentages. FanDuel’s handle had been US$16.8 billion with a hold percentage of 14.7% for the quarter.
Weingrod noted, “our estimates no longer reflect any contributions from new states given legalization uncertainty.”
A slight shrinkage of business was implied in Weingrod’s projection of US$2.7 billion in international revenue for Flutter during the fourth quarter. Even so, she raised her cash-flow guidance 2.5% to US$641 million. The effect of regulatory changes in the United Kingdom was not baked into her numbers.
Business in Italy was described as “decent” while Brazil was “still challenging.” But international revenue was bumped up to US$2.7 billion from slightly below that number. International cash flow was foreseen to be US$641 million, raised from US$627 million.
Turning to 2026’s prospects, Weingrod lopped 10% off her revenue and cash-flow forecasts, citing diminished handle growth. “To put it into context, we now model a handle [compound annual growth rate] of +6% over the next three years vs prior expectation of +9%,” she explained.
David McKee is an award-winning journalist who has three decades of experience covering the gaming industry.
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The Backstory
Setting the stage for a tougher narrative
Flutter Entertainment’s U.S. growth story is shifting from near-linear momentum to a more complex debate over handle, hold and product strategy. That tension has been building for months as Wall Street weighs slowing sports wagering handle against resilient revenue and cash flow. In a January preview of online-gaming stocks, Jefferies’ James Wheatcroft said investor attention had coalesced around growth versus valuation at the FanDuel parent, highlighting product updates and a simpler story to come in 2026 as potential catalysts. He framed the U.S. opportunity as intact and sizable, while acknowledging a sector still in transition. His view was broadly constructive in a short video that put Flutter at the center of investor focus, noting rising penetration and the prospect of more jurisdictions authorizing wagers in the medium term. Read his remarks in Jefferies’ preview of igaming and online sports betting.
Wheatcroft reinforced that stance in July with a Street-high price target and a multiyear growth case rooted in U.S. expansion and stable international positions. He argued that slower handle growth was not necessarily bearish for revenue because of mix shifts and rationalized promotions. That view underpins his rating in Jefferies’ “strong buy” on Flutter, where he mapped a path to higher cash generation even absent new state launches.
Handle slowed as the mix pivoted to higher-margin bets
The core pressure point for sentiment is handle. Flutter’s sportsbook growth decelerated through late 2024 into 2025 as the promotional environment cooled, the cadence of new state launches slowed and schedules in the NFL and NBA delivered fewer marquee matchups. Wheatcroft detailed the trend, noting U.S. handle growth for the industry eased in the fourth quarter of 2024 and again in early 2025, with Flutter underperforming that deceleration. He also pointed to a structural mix shift: bettors migrating toward parlays, in-game bets and other lower-stake but higher-margin products. That dynamic can suppress headline handle while supporting revenue and gross margin. He laid out the mechanics in Jefferies’ July analysis of handle trends and mix.
The implications matter for the next leg of the story. If operators keep trimming outsized promotions and lean into same-game parlays, handle may lag broader audience growth even as unit economics improve. That gives analysts reason to boost cash flow forecasts on strong hold when outcomes favor the house, yet trim out-year revenue or handle expectations if schedule quirks or competitive pressure persist. It also raises the stakes for product differentiation as the industry matures.
Prediction markets move from fringe to factor
One new source of competitive tension is event-based contracts. In August, Flutter said it would partner with CME on a federally regulated platform for economic event contracts, with sports not in the initial scope. Truist’s Barry Jonas called the pivot “predictable,” arguing it positions FanDuel to move quickly if regulations or strategy shift toward sports-related events. He also flagged the uneven regulatory map: states that bar sports betting cannot easily block federally overseen prediction venues, creating asymmetric exposure for licensed sportsbooks in non-OSB markets. That early read is detailed in Truist’s assessment of Flutter’s CME partnership.
The competitive line is blurry. Prediction platforms have experimented with sports-adjacent markets such as spreads and props, targeting states where sportsbooks are dark. Analysts have seen little cannibalization so far where both products coexist, but the category’s momentum—especially around tentpole events—has grown. For Flutter, the calculus is defensive and offensive: protect share if prediction markets encroach on sport-like contracts, and leverage two decades of global experience to build a parallel business if the regulatory climate allows. The timing will hinge on federal approvals and on whether state partners view event contracts as complementary or a threat to the regulated wagering ecosystem.
Regulatory noise rises at home and abroad
Beyond product strategy, regulatory overhang is widening. In Australia, the Northern Territory Racing and Wagering Commission—the licensing hub for many digital bookmakers—faces scrutiny over conflicts, slow enforcement and a light-touch approach. The commission has no full-time staff and has not published an annual report since 1993, according to critics. A government review is underway after media reports of delayed complaints and minimal penalties. The episode feeds a broader narrative that governance gaps can invite backlash, with potential spillover for large operators’ risk premiums. The latest developments are outlined in the probe of Australia’s online betting regulator.
In the Philippines, the pressure is focused on advertising. PAGCOR faces mounting criticism as gambling ads remain visible on major social platforms despite new payment rules and a ban on outdoor ads. Lawmakers have floated tobacco-style prohibitions across all media, though the government has not rallied behind a blanket ban. The tension underscores how policy can tighten quickly around marketing, user acquisition and brand visibility—key levers for growth in emerging online markets. The current landscape is detailed in coverage of PAGCOR’s ad oversight challenges.
For Flutter, these storylines do not directly change near-term U.S. fundamentals, but they add to a global compliance mosaic that investors must discount. Stricter norms on advertising, responsible play and data transparency tend to raise operating costs and lengthen product approval cycles, even as they stabilize markets over time.
What to watch into earnings and beyond
Three threads tie the backdrop together. First, guidance around the cadence of U.S. handle growth will be pivotal. Investors will parse whether late-2025 softness reflected schedule quirks and normalized promotions or a structural plateau, and how much revenue resilience management expects from higher-hold products. Any color on the balance between acquiring new bettors and deepening wallet share with cross-sell and parlays will matter.
Second, clarity on the event-contract roadmap could reset expectations. A timeline for approvals, the planned product set beyond economic benchmarks and guardrails to avoid friction with state regulators would help frame optionality. Analysts have suggested the CME tie-up gives FanDuel speed to market if and when sports-adjacent contracts become viable. The question is whether that hedge is offense or insurance.
Third, regulation will continue to shape the runway. Tax shifts, advertising limits and responsible-gaming mandates are all moving targets. Episodes in Australia and the Philippines show how quickly oversight narratives can harden. In the U.S., incremental tax changes or federal interpretations of prediction markets could alter economics at the margin. Investors will look for management confidence on medium-term revenue targets and on the ability to hold or expand margins in a more tightly regulated landscape.
The upshot: the growth-versus-valuation debate that Jefferies flagged early in the year is now colliding with a new set of variables—mix, emerging competitors and policy. That puts a premium on execution in product, compliance and capital allocation. The stronger the visibility on those fronts, the easier it becomes to look through handle noise and judge whether short-term pressure masks a sturdier long-term arc.
