Flutter Facing Rough Q4 on Prediction Market Cannibalization

Posted on: January 22, 2026, 12:54h. 

Last updated on: January 22, 2026, 01:21h.

Todd Shriber @etfgodfather Read More
Expertise: Financial, Gaming Business, Mergers and Acquisitions.
  • Flutter’s fourth-quarter results could disappoint, says analyst
  • December results were “uncharacteristically bad”
  • Prediction markets appear to be taking some share from online sportsbooks

Investors shouldn’t expect much from Flutter Entertainment (NYSE: FLUT) when it steps into the earnings confessional next month.

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The Flutter logo. The company’s Q4 results could disappoint, but the stock is attractively valued, says an analyst. (Image: Flutter Entertainment)

While there has been optimism surrounding online sportsbook operators’ fourth-quarter results due to improved NFL hold in November and December, Citizens Equity Research analyst Jordan Bender cautions that the final month of 2025 was unkind to the FanDuel owner.

Flutter results in December highlighted an uncharacteristically bad performance from a management team that has proven to be a top-notch operator over the years,” notes Bender in a report to clients. “Current state reporting highlights fairly decent gaming margins in November and December, but not enough to offset a known, sluggish October, while same-store December handle is trending down low-double digits.”

Compounding the potential woes for Flutter investors are the points that the operator invested $40 million in its business in its December quarter, and that promotional spending as a percentage of handle was elevated during that period, according to Bender.

Prediction Markets Proving Problematic for Flutter

Shares of Flutter and rival DraftKings (NASDAQ: DKNG) dealt with ample prediction markets headwinds last year, and while some data indicate yes/no exchanges are barely nibbling at regulated sportsbook handle, Bender says there’s mounting evidence that event contract purveyors are increasingly thorns in the sides of sportsbook operators.

“We believe prediction markets are taking share from the online sports betting industry, but the outsize impact on FanDuel, compared to its comps in 4Q25, has brought up incremental theories to explain the uncharacteristic underperformance compared to the industry,” he said in the report.

The analyst adds that those theories include the possibility that FanDuel is in fact losing share to prediction shares, that the recently launched DraftKings/ESPN partnership is luring bettors away from FanDuel, rivals’ improving product suites are doing the same, and Flutter “is right-sizing lower-end, unprofitable players, similar to BetMGM in 2024.”

Bender says Citizens is “in a wait-and-see mode” until Flutter provides more clarity with its fourth-quarter update and potential outlook for this year.

Flutter Stock Still Attractive

Shares of Flutter have shed nearly a third of their value over the past year and labor more than 40% below the 52-week high — bear market conditions to be sure. However, the upside of all that downside is that the stock may be offering investors value.

Bender calls the stock “attractive” at current levels, noting Flutter’s earnings power could soon reach levels comparable to some of the world’s largest casino operators, including Las Vegas Sands (NYSE: LVS) and MGM Resorts International (NYSE: MGM). The analyst says the gaming company could generate $3.8 billion in free cash flow in 2026 and 2027, paving the way for reducing the shares outstanding tally via buybacks.

“Management has put pieces in place to support strong cash flow growth in the medium term and lower leverage after several years of large capital outflows,” concludes Bender.