Sports betting margins hit record heights, Jefferies analyst says

David McKee

29 July 2025 at 11:42am UTC-4

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“After several consecutive quarters of unfavorable sports results, [the second quarter] is on track to deliver a record sports margin outcome,” Jefferies Equity Research analyst James Wheatcroft reported in a 27 July investor note.

Wheatcroft resumed coverage of Flutter Entertainment, putting a price target of £284 (US$379)1 GBP = 1.3353 USD
2025-07-29Powered by CMG CurrenShift per share on the stock, which was trading at £220. (US$294)1 GBP = 1.3353 USD
2025-07-29Powered by CMG CurrenShift This was equivalent to Jefferies US$380 per share price target for Flutter’s stateside-traded stock.

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Wheatcroft revealed that, internationally, second-quarter revenue margins for sports betting were tracking at a record 10%. May’s 11.2% margins and June’s 12.5% ones lifted the result well above the long-term average of 9.5%.

Singling out Oregon, Wheatcroft reported margins of as much as 15% for baseball and basketball wagering. “Meanwhile, parlay data from Illinois shows near record parlay penetration,” achieving 62% of all wagers and 29% of handle, with 23% margins in May.

The analyst also sought to allay fears of handle instability, pointing to 13% growth, which was consistent with the first quarter, despite a tougher second-quarter comparison. “At the same time, we believe that the underlying drivers of this trend (rationalizing promotional environment and product mix effects) have become better understood,” Wheatcroft wrote.

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He added that investors were becoming more comfortable with the dynamics of sports betting, viewing current events as a natural part of the evolution of the US market, rather than a reason for worry. Handle growth of around 5% for Flutter offspring FanDuel, Wheatcroft continued, would suffice to enable it to reach its medium-term projections, “given tailwinds from structural margin improvements and easing promotions.”

If possible, igaming was even stronger, according to Jefferies’ data. Its revenues grew at a consistent 30% or more throughout the quarter. Even in the mature market of New Jersey, which is in its 13th year of igaming, gambling continued to burgeon at a 26% pace.

FanDuel grew its igaming market share to a record 26%, trailed by DraftKIngs’ 23% and BetMGM’s 21%. “FanDuel now holds its greatest market share advantage over DraftKings since becoming market leader in early 2024,” said Wheatcroft. Its revenue growth in the second quarter was 42%, compared to DraftKings’ 24% and BetMGM’s 31%.

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Wheatcroft also took the occasion to introduce a tracker of FanDuel’s performance, one which showed it on pace to gross nearly US$1.8 billion in the second quarter, 4% ahead of consensus projections. The tracker also projected FanDuel growing sports betting revenue by 11% and igaming winnings by 38%, compared to analysts’ expectations of 7% and 33% respectively.

For its part, BetMGM was upgrading its cash-flow projections from vaguely in the black to $100 million in return on investment in the second quarter. Wheatcroft deemed this a continuation of first-quarter momentum.

“Consistent” was BetMGM’s description of wagering activity through 13 June, following on 34% revenue growth in the first quarter. Wheatcroft’s tracking projected $663 million in BetMGM revenue for the second quarter, which would represent 30% growth.