"We believe this new product enables us to harness a significant and incremental expansion of the US addressable market ahead of further state regulation - a space where our scale and experience give us a natural advantage. It expects an increase in prediction markets investment with adjusted EBITDA loss expected to be toward the top of previously guided range of $200 million to $300 million."
"We have not identified any evidence of any meaningful impact, referring to fears that prediction markets are eating into FanDuel's sportsbook business. According to Flutter, the analysis drew on industry channel checks, third-party data analysis of deposits, actives, and app download trends, and detailed analysis of FanDuel customer trends, and found that any handle effect likely sits in the low single digits percentage points."
Flutter Entertainment, parent company of FanDuel, is significantly expanding its prediction markets product despite investor concerns about profitability. The company plans to increase spending on prediction markets in 2024, with adjusted EBITDA losses expected toward the top of the $200-300 million guidance range. Management frames this as a deliberate long-term strategy to capture incremental US market expansion ahead of further state regulation. A key concern in the sector is whether prediction markets will cannibalize traditional sportsbook activity. Flutter addressed this directly, stating internal analysis found minimal evidence of meaningful impact on FanDuel's core sportsbook business, with any handle effect estimated in the low single-digit percentage range.
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