Flutter Entertainment, the parent company of companies like Betfair, FanDuel, and Paddy Power, has reported $4.74 billion in quarterly revenue, falling short of the $4.93 billion analysts expected.
Adjusted earnings also came in below forecasts, but the company has moved swiftly to reassure investors on the long term threat prediction markets will have on the regulated sports betting sector.
Chief executive says “generosity strategy” missed the mark
The results saw stocks slide 15% on Friday morning. The share price has decreased by more than 40% since the beginning of last year, with the explosion of prediction markets.
Since the start of 2026, the share price has fallen more than 40%, largely due to the proliferation of prediction markets offering products similar to sports wagers.
Consecutive weeks of strong margins for the company in the quarters prior and the failure to follow up on that by the company was a potential reason as to why Flutter failed to hit expectations, according to Chief Executive Peter Jackson.
“It’s fair to say not everything went our way this quarter”, Jackson told CNBC Business News.
“We have seen very strong margins over the course of the 2025/2026 NFL season, which may have impacted customers. We probably did not execute on our generosity strategy as well as we could have done, leading some customers to put their cue in the rack and stop betting on the NFL to the back end of last year.”
He also touched on the lack of compelling narratives throughout the back end of the NFL season as another issue affecting revenue.
“We know how important player narratives are. There was one single player who had more money bet on him throughout the course of the season than the Patriots got,” he said. “That stuff is super important and when the key players don’t make the playoffs or the Super Bowl, it really does impact engagement and betting volumes.
FanDuel Predicts a “massive opportunity”
FanDuel has launched FanDuel Predicts, a new platform that allows users to forecast the outcomes of major news, sports and cultural events in a regulated, exchange-style marketplace.
The product marks the company’s formal entry into the fast-growing prediction market space, expanding beyond traditional sports betting. The move is aimed at blending fan engagement with real-time event forecasting, as interest in event-based trading accelerates in the U.S. The launch positions FanDuel alongside emerging competitors seeking to capitalize on demand for outcome-based speculation.
Mr Jackson reiterated the company’s excited outlook on the product, while calming fears of a prediction market takeover.
“We are pleased to get it launched. It gives us a massive opportunity to go after half of Americans who currently don’t have access to FanDuel Sportsbook. We are taking a disciplined rollout. The product is live and in 18 states that customers can access sports with, and over the course of this year, we are going to add new content for customers.”
Prediction markets to hasten sports betting regulation
Speaking in an earnings call, Mr Jackson said prediction markets could help accelerate the expansion of regulated online sports betting and iGaming across the United States, calling it the company’s most valuable long-term opportunity in the market.
He also explained how a broader adoption of event-based trading platforms may hasten state-level legalization efforts by exposing more consumers to regulated-style products: He added: “We can deliver attractive returns by providing sports markets to the 40% of the U.S. population who cannot currently access online regulated sportsbooks.
Currently, prediction market companies, like Kalshi, are locked in regulatory battles across several states, who argue its event-based contracts amount to unlicensed gambling. States including Nevada and Massachusetts have sought to block the company from offering contracts tied to sports and other outcomes, contending that such products fall under state gaming laws.
Kalshi has responded with lawsuits of its own, arguing that its markets are federally regulated financial instruments, not bets, and therefore beyond the reach of state gambling authorities.
At the center of the fight is whether oversight by the Commodity Futures Trading Commission (CFTC) preempts state enforcement.Kalshi maintains that because the CFTC regulates it as a designated contract market, federal law overrides conflicting state gaming rules. Several state regulators dispute that claim, saying Congress never intended for federal derivatives law to open a back door to nationwide sports betting without state licenses.
The resulting litigation has created a patchwork legal landscape, with courts weighing questions of federal preemption, the definition of gambling and the limits of state authority. The outcomes could determine not only whether prediction markets can operate nationwide without state licenses, but also how U.S. law draws the line between financial trading and online betting.
