FanDuel owner cuts profit forecast, to launch event contracts next month

DUBLIN (Reuters) -Flutter, the world’s largest online betting company, sharply cut its full-year profit growth forecast on Wednesday, primarily due ​to another long winning streak by gamblers that increased its payouts.

Already number one in the ‌booming U.S. sports betting market through its FanDuel brand, Flutter and its partner CME Group also announced the ‌launch of the FanDuel Predicts app next month to target what it described as a significant growth opportunity in the rapidly expanding event contracts market.

Event contracts allow investors to bet on the likelihood of specific events occurring, from sports and entertainment to politics and the economy.

Flutter estimated that the investment needed to ⁠”aggressively” expand the new ‌business will reduce its group core profit by $40 million to $50 million in the fourth quarter and another $200 million to $300 million next year.

Flutter cut ‍its full-year 2025 core profit forecast, to $2.9 billion from $3.3 billion, in August, mostly due to the run of customer-friendly sports results in the third quarter that only got worse ​in the first six weeks of the current quarter.

Bookmakers tend to suffer when gamblers’ favourites ‌win and CEO Peter Jackson said Flutter had “complete conviction” in how it calculates odds after sports results have now gone against the Irish-founded group in the U.S. for much of the last year.

Flutter’s third-quarter adjusted earnings before interest, tax, depreciation and amortisation (EBITDA) of $478 million, up 6% year-on-year, beat the ⁠$459 million average estimate of 17 analysts with LSEG SmartEstimate.

However,​ Flutter’s full-year outlook for 24% year-​on-year earnings growth was well below analysts’ expectation for EBITDA of $3.2 billion.

While FanDuel Predicts will allow users to bet on specific events such as ‍election outcomes or the performance ⁠of financial markets across almost the whole of the U.S., it will limit event contracts on sporting events to states where online sports betting is illegal.

As new states ⁠legalise online sports betting, Flutter will cease offering sports event contracts there and said it believes the boom in ‌prediction markets will accelerate the legalisation of sports betting that offers tax revenues to states.

(‌Reporting by Padraic Halpin; Editing by Richard Chang)