DraftKings, FanDuel Q4 Hold Rates in Focus Ahead of Q3 Earnings

• Operators struggling to capture maximum benefits of NFL season
• If Q4 holds disappointment, 2026 consensus estimates could be lowered, says analyst
• Quarter-to-date hold in New York is pacing at 8.6%, below the prior three quarters

Prediction markets have delivered headline pressure on sports betting stocks, including DraftKings (NASDAQ: DKNG) and FanDuel owner Flutter Entertainment (NYSE: FLUT), but with operators enduring a rough start to the 2025 NFL season, some analysts are turning their attention to fourth-quarter hold estimates.

In a Friday note to clients, Macquarie analyst Chad Beynon said whether or not online sports betting companies capture maximum fourth-quarter benefits from the NFL is “the million-dollar question” ahead of upcoming third-quarter earnings reports. It’s a point worth pondering because some analysts have already noted DraftKings and Flutter third-quarter earnings could be pinched by another series of customer-friendly NFL outcomes – a theme that plagued the operators’ fourth-quarter earnings last year.

If 4Q25 is another year of disappointing NFL hold, we anticipate a re-calibration of future hold expectations (specifically for 4Q NFL) and a potential downgrade in ’26 consensus estimates as well as more conservative ’26 guidance from management,” observes Beynon.

He maintains “outperform” ratings on DraftKings and Flutter with price targets of $52 and $330, respectively. Those price objectives imply upside of 42% for DraftKings and 32% for Flutter from the Thursday, Oct. 16 closes.

DraftKings, FanDuel Hold Estimates May Be Ambitious

Due to the arrival of NFL betting, September typically accounts for half of operators’ third-quarter handle, and with the month and the quarter in the books, data indicate DraftKings’ and Flutter’s earnings before interest, taxes, depreciation, and amortization (EBITDA) for the period could suffer.

“Current 4Q25E consensus EBITDA for DKNG/FLUT currently sit at $396/570m (+343%/250% year-over-year), which we believe assumes gross hold rates of 10.0%/11.2% and net hold rates of 7.6%/8.8%, respectively,” according to Beynon. “Over the last two years, DKNG/FLUT 4Q net hold rates averaged 5.7%/6.9%, respectively.”

The analyst notes that in the early stages of the current quarter, hold has average 8.6% in New York, the largest sports betting market in the country. That’s off the pace set in each of the prior three quarters.

Prediction Market Pain Could Spell Opportunity

As has been widely documented, soaring football event contract volume on prediction markets like Kalshi has been a source of pain in recent weeks for sports wagering stocks with declines led by DraftKings and Flutter.

Citing takeaways from conversations with industry insiders at the recent Global Gaming Expo (G2E) in Las Vegas, Beynon reiterated the view that the selloff is overdone and that opportunity may be afoot with stocks like DraftKings and Flutter.

“We think strong Sept OSB volumes and reassuring commentary during 3Q earnings calls will both serve as nice near-term catalysts for Online share prices as investor concerns ease over the near term,” concludes the analyst. “We believe this, in combination with strong NFL hold rates in 4Q and continued robust iCasino growth, could even propel DKNG/FLUT share prices back to their August highs before year-end (+36%/+23% from current levels, respectively).”