FanDuel Misses Projections As Betting Favorites Dominate 

A run of favored teams dominating top-tier sporting events is causing further turbulence in the U.S. sports betting market, with even more expected.

Flutter Entertainment, parent company of U.S. market leader FanDuel, said in its first-quarter earnings report that “adverse sports results,” particularly the recent March Madness dominated by favorites, cut into its revenue during the period. The company’s $3.7 billion in quarterly revenue and $335 million in net income, while solidly up over the comparable period in 2024, missed analyst expectations. 

Additionally, Flutter has lowered its full-year guidance for the U.S. market, and now expects to deliver $7.4 billion in revenue and $1.13 billion in adjusted earnings for 2025. Those figures are down from prior targets of $7.72 billion in revenue and $1.4 billion in adjusted earnings, but will still represent significant year-over-year growth.

Both FanDuel and top rival DraftKings made similar comments regarding 2024’s fourth quarter, blaming “the most customer-friendly NFL results in 20 years” for “significant adverse impacts” to revenue during the critical fall period. DraftKings will release its first-quarter earnings report after the close of Thursday trading and discuss the results with analysts the next morning.

As sports betting continues to develop in the U.S., such a situation remains a growing concern as additional analytics available to both pro teams and bettors have made some on-field outcomes more readily predictable, and could also play out in Major League Baseball this year. Flutter, however, remains confident that its overall market status will withstand that.

“The nature of sports results will influence our quarterly results as we have seen in the NFL in Q4 and March Madness in Q1,” said Flutter CEO Peter Jackson in an earnings call with analysts. “But over time, these variations are transient and we do not compromise our compelling growth model, a long-term value creation opportunity. In fact, it’s these ups and downs in sports results that makes sports exciting and drives engagement.”

Penn Status

Elsewhere in sports betting, ESPN Bet operating partner Penn Entertainment said Thursday that it posted a 4% increase in first-quarter earnings to $1.67 billion and reversed a prior $114.9 million loss to a $111.5 million gain. The results represented a critical sign of life after a more challenged report for 2024’s fourth quarter, one in which Penn Entertainment president and CEO Jay Snowden mused about potentially ending the $2 billion sports betting partnership with ESPN early. 

ESPN Bet remains well behind U.S. sports betting market leaders FanDuel and DraftKings in most states. Penn Entertainment is also facing a lawsuit from activist investors seeking a board seat, an action that calls the company’s “foray into the sports betting world a complete failure.” Snowden, however, expressed confidence in a turnaround for ESPN Bet, fueled in part by an integration into ESPN’s forthcoming direct-to-consumer streaming service. 

“We’re finally getting to a point, after being live with ESPN Bet for a year and a half, where the really deep integrations that we were really excited about when we did the deal are starting to happen,” he said in an earnings call with analysts.