Flutter Lowers Earnings Guidance After FanDuel Ends 2024 With ‘Unfavorable US Sports Results’

Flutter Entertainment, the Dublin-based parent company of FanDuel, issued a press release Tuesday updating its revenue expectations for the fourth quarter of 2024 and for the year as a whole, following “a period of very unfavorable US sports results across the remainder of November and in December, primarily on NFL Parlay and Same Game Parlay outcomes.”

The release continued, “The 2024/2025 NFL season to date has been the most customer friendly since the launch of online sports betting with the highest rate of favorites winning in nearly 20 years.”

FanDuel Sportsbook is the national leader in sports betting handle and revenue, and “unfavorable” results are a relative term in an industry in which the overall hold percentage (win for the house) in the regulated market across all reporting states and sportsbooks for 2024 was 9.5%. In Nevada in 2017, the year before sports betting legalization took off in other states, the hold was 5.1%.

A publicly traded company (NYSE:FLUT, LSE:FLTR), Flutter used the update to adjust its earnings guidance downward following a Q3 report on Nov. 12 that was more optimistic.

At the time, U.S. revenue for 2024 was projected between $6.05-$6.25 billion, and Adjusted EDITDA was pegged between $670-$750 million.

This week’s update lowered revenue guidance to approximately $5.78 billion (down $370 million from the previous guidance midpoint) and lowered Adjusted EBITDA guidance to approximately $505 million (down $205 million).

Chalk walked the walk in NFL

As reported by ESPN.com’s David Purdum among others, this was a historic NFL season for betting favorites. Through Week 17 (the last regular-season week of calendar year 2024), NFL favorites had won 71.8% of games, the highest such percentage since 2005.

Usually, the more favorites that win, the more multi-leg parlays by sports bettors succeed.

FanDuel has focused heavily the last several years on driving customers toward parlays, which typically result in a much higher hold rate for sportsbooks than straight bets. For customers, parlays offer an opportunity to risk small amounts of money to win large amounts, with the operators usually coming out far ahead in the long-term.

The release did not go into specifics on hold rates, and “customer friendly” does not necessarily mean customers were profitable overall. It is in fact highly improbable that customers overall were profitable over any meaningful stretch on parlays. So one logically interprets the data to mean FanDuel still came out in the black — just not by as great a margin as Flutter projected.

Don’t cry for FanDuel

Despite the “unfavorable” results, Flutter noted that “the transitory nature of these results has no impact on the underlying assumptions and guidance expectations communicated at our Investor Day in September, and we remain confident in the growth drivers and long-term growth trajectory set out at the Investor Day.”

Flutter also shared that while NFL results went the public’s way in a relative sense, the house did well on other sports, specifically singling out English Premier League soccer.

It is expected that other sportsbook operators shared in FanDuel’s relative struggles this NFL season; rival DraftKings and other online sports betting companies are anticipated to announce their own downward revenue and EBITDA adjustments in the coming days.

Flutter noted in its release that a more detailed update and formal guidance for 2025 will come on the company’s Q4 earnings call, scheduled for March 4.