Flutter Entertainment, the parent company of FanDuel, said it plans to ramp up investment in prediction markets following what executives described as encouraging early traction for FanDuel Predicts, revealing in its Q4 earnings report and Thursday earnings call that spending will trend toward the upper end of its prior guidance.
“We now expect that our prediction markets investment will be towards the upper end of the previously guided range,” CFO Rob Coldrake said on the company’s Q4 call, citing what he called “the significant opportunity we believe exists to drive customer acquisition.”
Flutter has previously guided to a $200 million to $300 million adjusted EBITDA impact tied to prediction markets investment in 2026. On the call, Coldrake said the company expects spending to land closer to the top end of that range as it looks to scale FanDuel Predicts.
CEO Peter Jackson framed prediction markets as a long-term growth opportunity rather than a defensive response to competitive pressure.
“The opportunity across prediction markets is certainly far bigger than any potential cannibalization of our existing sports betting business,” Jackson said.
Flutter launched FanDuel Predicts late in Q4 and is positioning the product as both a customer acquisition tool and a strategic bridge into states where traditional online sportsbooks remain unavailable.
Flutter keeps options open on exchange infrastructure
In its Q4 earnings press release filed with the SEC, Flutter said revenue climbed 25% in the quarter to $4.74 billion and adjusted EBITDA rose 27% to $832 million, results that provide financial backing for longer-term initiatives such as its push into prediction markets.
During the earnings call’s Q&A with analysts and investors, the Flutter executives were pressed on whether the company might acquire an existing Designated Contract Market (DCM) operator rather than relying on outside partners to offer prediction markets. Jackson did not signal any immediate acquisition plans but said Flutter intends to “retain flexibility” as the category develops, leaving open the possibility of deeper structural control as the market matures.
“We’re very happy with the CME,” Jackson said, referring to the company’s current arrangement, which relies on contracts provided through CME Group. “We’ve got a strong pipeline of product improvements coming through.”
While indicating comfort with the existing setup, Jackson added that Flutter expects to share further details on its evolving prediction markets strategy “in due course,” suggesting additional structural decisions could emerge.
Flutter says prediction markets are not hurting sportsbook performance
Flutter used its Q4 earnings call to directly address one of the central questions surrounding prediction markets: whether they are siphoning activity from regulated sportsbooks.
“We … don’t believe prediction markets are having a meaningful impact on our business,” Flutter CEO Peter Jackson said, adding that a “comprehensive review” found “no evidence of material cannibalization on our existing business.”
The executives attributed the moderation in sportsbook handle trends in Q4 to elevated NFL win margins and a playoff slate lacking marquee teams and star players, which they said dampened customer engagement. The company’s internal review, Jackson said, found no evidence that prediction markets were driving the slowdown.
The company also linked prediction markets to a broader strategic objective. Jackson said Flutter believes growth in event contract trading could ultimately speed up legalization of sports betting and online casinos in additional states, as lawmakers respond to growing consumer demand and shifting regulatory dynamics.
“We believe that prediction markets will accelerate state regulation of online sports betting and iGaming,” Jackson said. “This, in our view, is the most valuable long-term opportunity in the U.S.”
Arkansas approval highlights sportsbook-first preference
Flutter also described prediction markets as a way to engage customers in states where legal online sportsbooks are unavailable. FanDuel Predicts is live in all 50 states, but only 18 states have access to sports event contracts.
“We can deliver attractive returns by providing sports markets to the 40% of the U.S. population that cannot currently access online regulated sportsbooks,” Jackson said, pointing to FanDuel Predicts as a way to reach customers ahead of potential legalization.
That approach was reflected in Arkansas, where the Arkansas Racing Commission on Thursday approved FanDuel’s vendor license, clearing the way for the company to provide statewide mobile sports betting through an in-state casino partner. Jackson suggested having a licensed sportsbook in states, rather than FanDuel Predicts (which was never available in Arkansas), is the preferred long-term model.
“When you’re giving customers the choice, the breadth of offering that you have in a traditional regulated sportsbook, together with the generosity playbook you can provide, is a much more compelling offering,” Jackson said.
Other gaming operators remain wary of prediction market expansion
Flutter’s willingness to invest aggressively in prediction markets stands in contrast to the more cautious tone struck by several traditional casino operators.
Much of that caution stems from warnings from state gaming regulators that participation in prediction markets could threaten existing gaming licenses. The Michigan Gaming Control Board, for example, told gaming operators that any participation in sports event contracts could have “implications relative to your licensure.”
Against that backdrop, during Thursday morning’s Q4 earnings call, PENN Entertainment CEO Jay Snowden framed the issue as an industry-wide constraint.
“It really puts the PENN and the MGM and the Caesars of the world in a very awkward position,” Snowden said. “Those gaming licenses are the most valuable assets we have. We’re not gonna put those at risk. When regulators say, ‘This is illegal gambling, don’t do it,’ we don’t do it.”
Caesars addressed prediction markets directly on its Feb. 17 Q4 earnings call. “To me, this is clearly gambling … and it’s been made clear to us in a number of states that if we pursue that avenue, some of our brick-and-mortar licenses could be at risk,” CEO Tom Reeg said, reiterating the company does not plan to participate under current conditions.
MGM Resorts did not address prediction markets during its Feb. 5 Q4 earnings call, but CEO Bill Hornbuckle has voiced strong opposition to sports event contracts, describing them as “without a doubt sports betting, full stop” and warning they could invite greater federal involvement in gambling regulation. He has also said MGM would “absolutely” be a “fast follower” if greater regulatory clarity emerges around prediction markets.
During today’s PENN call, unlike the Flutter execs, Snowden said he believed prediction markets are indeed affecting sportsbook activity, even if the scale remains unclear.
“I think there’s lots of variables that impact handle. Prediction markets certainly are one of those,” Snowden said. “How much? We don’t know today.”
Sports betting companies testing prediction markets cautiously
While traditional casino operators argue prediction markets could jeopardize valuable state gaming licenses, sportsbook-focused companies like Flutter/FanDuel appear to be taking a more measured but opportunistic approach.
Rather than deploying event contracts directly alongside their core betting products, FanDuel, along with DraftKings and Fanatics, has limited sports prediction markets to states where they do not already operate full online sportsbooks, including major markets like California and Texas. The strategy expands geographic reach while reducing potential regulatory friction tied to existing licenses.
For Flutter, the question now is less whether prediction markets can attract customers and more whether the category can scale without triggering the kind of licensing backlash competitors like PENN, Caesars and MGM have warned about.
