Flutter unfazed by Brazil igaming ban, Jefferies analyst says
Despite an abrupt and sweeping ban on igaming in Brazil, it should present minimal detriment to Flutter Entertainment, Jefferies Equity Research analyst James Wheatcroft expressed in a 28 September investor note.
President Luiz Inacio Lula da Silva has imposed a total and near-immediate proscription on Internet-based betting and gambling platforms, effective 6 October. However, Wheatcroft opined that “Brazil’s market shutdown does not materially affect estimates” for Flutter.
Reporting from G2E in Las Vegas, Wheatcroft said the delivery was crucial for Flutter but that his findings “support a constructive outlook” on the stock. He noted that Flutter subsidiary FanDuel was shoring up its United States market position with heavier promotional spending, which he expected to continue through the 2027.
“We anticipate that FanDuel promo will remain elevated for longer than we (and consensus) anticipate,” Wheatcroft wrote. He continued that he had previously assumed that promotions would consume 6% of 2026 handle, diminishing to 5.25% in the coming year. He revised that guidance to 6% throughout 2027.
This prompted Wheatcroft to shave 8% off his US cash-flow projections. He placed them at US$1.1 billion, 6% below Wall Street’s consensus forecast.
“Handle robust, margin low” was Wheatcroft’s outlook for FanDuel. He projected 10% growth in online sports betting revenue and 17% in igaming. He also prognosticated a third-quarter increase in igaming of 16% in 2026.
However, a large September spike in OSB, on the order of 17%, would be required to make up for 7% growth in July and August, Wheatcroft found. But “unfavorable margins” in early NFL betting had FanDuel down 39% in proxy jurisdiction New York State through September’s first 21 days.
“We estimate that Flutter requires high teens hold in the final week to achieve the required +17% September OSB growth,” the Jefferies analyst wrote. In order to do this, hold of 12% would need to be averaged, although he noted that FanDuel had held as high as 14% three times in the 2025-6 NFL season.
Wheatcroft also met with Flutter CEO Peter Jackson, who assured the analyst that August softness was the product of the calendar and of prior-year comparisons, not a symptom of a larger debility. Jackson also was upbeat on FanDuel Predicts. Wheatcroft reported it “is now on par with peers following the Crypto.com partnership, while market making continues to scale.”
Brazil was almost an afterthought. Wheatcroft observed that it accounted for 1% or less of Flutter cash flow. He added that “we anticipate another limited impact given consensus currently expects break-even in Brazil.”
Should the Brazilian congress not approve Lula’s decree, Flutter executives maintained they were ready to resume business as usual in the South American nation. Wheatcroft saw several disincentives for parliament to uphold the ban.
The first was the Brazilian consumers would be looking to the offshore, unregulated market, with its lack of consumer protections. He also pointed to a tax drain on Brazil to the tune of US$1.9 billion, adding that “we see a permanent market closure as a low probability outcome.”
David McKee is an award-winning journalist who has three decades of experience covering the gaming industry.
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The Backstory
Brazil shock lands against a broader Flutter debate
Brazil’s abrupt move to ban internet-based betting and gambling platforms put a fresh political risk in front of Flutter Entertainment, but the market reaction is being filtered through a longer-running debate over the company’s US growth, promotional spending and exposure to prediction markets. The latest Jefferies view, centered on the effect of President Luiz Inacio Lula da Silva’s decree, treats Brazil as a manageable disruption rather than a thesis-changing event for Flutter.
That conclusion matters because Flutter’s investment case has been under pressure for much of the past year. Investors have questioned whether FanDuel’s US sports betting handle is slowing for cyclical reasons or because of a structural shift toward lower-cost alternatives, including prediction markets. Jefferies analyst James Wheatcroft has repeatedly argued the market is misreading the data, even while trimming estimates and acknowledging heavier spending in the United States.
The Brazil ban adds another source of uncertainty, but one that Jefferies says is small in financial terms. The country accounts for 1% or less of Flutter cash flow, according to the latest note. Wheatcroft’s bigger concern is the US business, where FanDuel remains the core growth engine and where margins, promotions and the NFL calendar can shift quarterly expectations.
A stock story shaped by handle anxiety
Flutter’s current valuation debate began with a deceleration in online sports betting handle. In July, Wheatcroft described Flutter as a strong buy and argued that slowing US handle growth reflected a maturing market, not a weakening consumer or a broken product. As Inside Asian Gaming reported on Jefferies’ bullish Flutter call, the analyst pointed to reduced free-bet activity, fewer new state launches and a changing product mix as reasons handle growth had cooled.
That distinction is central to the present Brazil analysis. Handle is the amount wagered, not revenue. If bettors shift toward parlays and in-game wagers, handle can grow more slowly even as revenue and margins improve. Wheatcroft said that was already happening in the US, where operators have become more disciplined on promotions after years of aggressive customer acquisition. The result is a headline drag on handle but a potential boost to profitability.
The same July note laid out the longer-term case. Jefferies expected Flutter to benefit from rising penetration in existing US states, additional legalizations and a large international base with leading positions in major markets. Wheatcroft said Flutter could produce 17% revenue growth and 42% cash-flow improvement by 2030 even without new jurisdictions or a rebound in handle growth. That framework helps explain why Brazil, despite being a large prospective market, does not dominate Jefferies’ valuation.
Prediction markets became the pressure point
The sharper investor fear has been prediction markets. Platforms such as Kalshi moved into sports-related event contracts, prompting concern that they could drain betting volume from regulated sportsbooks. In February, Wheatcroft said that concern was overstated and that FanDuel’s softer handle did not show cannibalization. As Inside Asian Gaming reported on Jefferies’ view that Flutter was stronger than it appeared, the analyst blamed an adverse sports calendar and promotional cutbacks rather than structural share loss.
That argument evolved over the summer. In a later note, Wheatcroft said prediction markets might become incremental to Flutter, not a threat. Inside Asian Gaming reported on his conclusion that the prediction-market threat was overrated, with Jefferies citing market making and FanDuel Predicts as possible sources of cash flow. Wheatcroft estimated market making could contribute hundreds of millions of dollars if Flutter captured a meaningful share of activity on third-party platforms.
The prediction-market debate is important to Brazil because it shows how Jefferies is separating regulatory noise from core economics. Where investors saw new products as a threat to FanDuel’s moat, Wheatcroft saw a potential extension of pricing expertise. Where a ban in Brazil suggests a regulatory shock, Jefferies sees a market that is not yet material to group cash flow and may be too valuable in tax terms for lawmakers to close permanently.
Margins helped offset the slowdown narrative
Flutter’s defenders also have pointed to sports betting margins and igaming growth. In late July, Wheatcroft said second-quarter sports betting margins were tracking at record levels after several unfavorable quarters. Inside Asian Gaming reported on Jefferies’ finding that margins had hit record heights, with international sports betting revenue margins tracking near 10% and monthly figures in May and June above long-term averages.
That helped reframe the handle concern. Slower wagering growth matters less if operators earn more on each dollar bet. Parlays, for example, typically carry higher margins than straight bets. Jefferies cited Illinois data showing near-record parlay penetration, while noting that FanDuel’s igaming share had reached a record 26%, ahead of DraftKings and BetMGM. FanDuel’s igaming revenue growth was estimated at 42% for the period, stronger than major competitors.
Igaming strength is particularly relevant because Brazil’s decree targets internet betting and gambling broadly. For global operators, online casino can be a high-growth, high-margin complement to sports betting. But Jefferies’ view is that Flutter’s most important igaming economics remain tied to established and regulated markets, especially in the US, where state-level legalization still offers runway. Brazil would be useful, but the current numbers imply it is not yet essential.
Jefferies stayed bullish while cutting expectations
Jefferies’ support for Flutter has not been unconditional. Wheatcroft cut his US cash-flow projections and, earlier in the year, slashed his price target while maintaining a buy rating. In March, Inside Asian Gaming reported on Wheatcroft’s defense of Flutter after he lowered his per-share target to US$210 from US$380. The reduction reflected weaker assumptions, but not a collapse in the investment case.
The March analysis framed handle declines as transitory and said state data, together with prediction-market activity, could bring investors back to the stock. Wheatcroft said downgrades were tied to NFL underperformance and insufficient promotions, both of which management could address. He also noted Flutter’s Missouri launch, where FanDuel reached 5% of the state’s population within the first month despite Missouri being a prediction-market-only state until December.
That history sets up the latest conclusion on Brazil. Jefferies is not ignoring risks. Its current analysis assumes FanDuel promotions will remain elevated for longer, cutting US cash-flow expectations. Wheatcroft also highlighted unfavorable early NFL margins and the need for a strong September finish to hit growth targets. But those are operating issues inside Flutter’s largest profit pool. Brazil, by comparison, is a smaller and potentially reversible regulatory setback.
Why the stakes extend beyond one decree
The Brazil ban still carries broader implications. A permanent closure would push consumers toward offshore operators, weaken consumer protections and cost the government tax revenue, according to Jefferies’ analysis. That is why Wheatcroft views a lasting shutdown as unlikely. If Congress rejects Lula’s decree, Flutter has said it is ready to resume normal operations in the country.
For Flutter, the immediate stakes are therefore less about lost Brazilian earnings and more about investor confidence in the company’s ability to manage regulatory and competitive shocks. The company is already spending more to defend FanDuel’s US position, developing FanDuel Predicts and trying to convert a changing betting mix into stronger margins. Brazil adds political volatility, but not enough, in Jefferies’ view, to overwhelm the US-led growth story.
The backstory shows why the latest note reads as measured rather than dismissive. Flutter’s shares have been buffeted by fears of slowing handle, prediction-market disruption and promotional pressure. Jefferies has adjusted estimates while keeping the same basic thesis: FanDuel’s US franchise remains valuable, igaming is growing quickly and prediction markets may be an opportunity as much as a threat. Brazil is the newest risk, but not the one Jefferies believes will define Flutter’s trajectory.
