With Jackson set to leave Flutter, will FanDuel Predicts catch up with rivals?

When Flutter CEO Peter Jackson leaves his post in late-September, the world’s largest online gambling company will begin the 2026-27 NBA season without two of its top executives from Opening Night a year ago.

On Wednesday’s second-quarter earnings call, Jackson announced he would be stepping down after nine years in the role — a departure that comes as sportsbooks continue to feel the strain from the meteoric rise of prediction markets. Jackson will leave Flutter only months after former FanDuel CEO Amy Howe cut ties with the company. The announcements would have seemed unfathomable at this time last year, when FanDuel stood atop the podium in the intense battle for the sports bettor’s wallet.

Although it offers sports event contracts through FanDuel Predicts, Flutter has fallen far behind others that own an internal market-making exchange. Bolstered by the first World Cup in North America since 1994, US prediction markets saw an estimated $50 billion in trading volume from event contracts on the quadrennial tournament. In June, Kalshi handled about 83% of the notional volume share among prediction markets, with FanDuel Predicts off the lead lap.

Flutter is now at a crossroads, with Dan Taylor succeeding Jackson on 1 October. Taylor inherits immediate challenges after Flutter lowered its full-year US adjusted EBITDA guidance by 22% amid uncertainty on prediction market revenues. Flutter reported $6 million in prediction market-related revenue in the second quarter and estimates $50 million from the segment for the full year. But in a year when the prediction market arms race has reached a fever pitch, Flutter anticipates category expenses of more than $200 million.

“I look forward to leading the business as we continue to innovate, grow and build on the strengths that make Flutter unique,” Taylor said in a statement.

A pivot to Crypto.com

Besides the announcement on the leadership transition, Flutter indicated that FanDuel Predicts will move all sports and novelty contracts from CME Group Inc. to Crypto.com.

Despite the transition, CME Group still owns a 51% stake in FanDuel Predicts, where customers will continue to have access to CME financial derivatives. Curiously, Flutter remains hesitant to launch its own market-making exchange, with Jackson only stating that the company needs to be “thoughtful” in how it positions itself. As Jackson plans his exit, he advised Flutter to exercise restraint given some of the market-making complexities of owning an internal exchange.

Elsewhere, an eccentric hedge fund manager announced on his Substack blog Wednesday that he more than doubled his stake in Flutter. Michael Burry, the investor portrayed in the 2010 best-seller “The Big Short”, indicated that he swooped up the shares at an average cost of $90 a share. Burry, who was played by Christian Bale in the film adaptation, described the purchase as a “fat pitch”.

After dropping nearly 13% on the subdued guidance, Flutter fell to an intraday low of $89.71 on Wednesday — its lowest level in five years. The FanDuel parent rebounded on Thursday to close at $94.46, up 1.6%. Burry, the founder of Scion Capital, blamed the sell-off among sports betting stocks on the surge in activity on prediction markets.

“We know why this is happening, and why the stocks are falling. Prediction markets have taken the gambling world by storm,” Burry wrote, calling attention to Kalshi’s $39.7 billion in annualised trading volume.

Poised for a comeback?

Joe Stauff, senior research analyst at Susquehanna International Group, wrote in a research note that the decline likely suggests the following:

• Skepticism on customer retention
• Anxiety on hyper-competition this fall in online sports betting during the football season
• Indications that FanDuel is ~9-12 months behind DraftKings in establishing a prediction market offering

Despite Flutter’s slow start on predictions, the forecast is not completely gloomy. Outside the US, international revenues grew 10% year-over-year, driven by a strong quarter in Italy. In several markets where the Betfair Exchange coexists with other sportsbooks — like the UK, Italy and Brazil — Flutter has found that the exchange has a “pretty small market share”, Jackson explained.

Stauff, meanwhile, highlighted Flutter’s strong international presence as a potential catalyst for Flutter to “course correct”. Stauff noted that Flutter grew average monthly players by 30% in June, a key metric across the industry.

In the 5 August note, Stauff wrote that the replacement of Jackson conveys that Flutter appreciates the gravity of FanDuel’s missteps. Stauff added that “tangible progress on FanDuel’s fix, the immediate replacement of Flutter’s CEO and a steady international portfolio,” are why Susquehanna maintains a positive rating. Stauff lowered his price target from $121 a share to $115.

Macquarie analyst Chad Beynon lowered his target from $190 a share to $160 on revised estimates and a reduction in its valuation multiple.

“Flutter has accumulated a diversified portfolio of leading brands and tech through its replicable and proven M&A strategy, making it a top way to capture global secular trends in online gambling and legalization, in our view,” Beynon wrote.

Shifting attention to DraftKings

By Thursday evening, the companies representing the top four sportsbooks in the US — FanDuel, DraftKings, BetMGM and Caesars — all reported second-quarter earnings. DraftKings, which released earnings after the bell on Thursday, maintained its fiscal year 2026 revenue guidance range of $6.5 billion to $6.9 billion.

For the first time in an earnings release, DraftKings defined quarterly sports revenue as the total amount of online sportsbook, retail sportsbook, and prediction markets revenue for a three-month period.

DraftKings generated sports revenue of $1.99 billion for the three-month period ended 31 May, delivering an increase of 5.7% from the year-ago quarter. Since the start of 2026, more than 600,000 customers have engaged with DraftKings’ predictions segment, the company announced.

“Predictions is already growing faster than we anticipated,” DraftKings CEO Jason Robins said in a statement. “Our playbook to innovate on a leading Predictions offering all underpin our confidence that we can win the category this NFL season and beyond.”

Around 5pm ET, DraftKings traded near $22 a share, down 1.4% in the after-hours session. While DraftKings is down about 35% year-to-date, the losses are even more devastating at Flutter.

Since its record-closing price of $308.60 on 28 August 2025, Flutter has plunged more than 65%. At its peak, Flutter boasted a market capitalisation of around $53 billion, but the company ended Thursday’s session with a market cap a smidge above $16 billion.