Story Stocks^®

Flutter Entertainment (FLUT) is trading sharply lower today after reporting its Q3 results last night. The global online gaming operator comfortably beat EPS expectations, while revenue grew 16.8% yr/yr to $3.79 bln, roughly in line with estimates. Shares, however, have remained under pressure since Q2 amid rising concerns around competition from fast-growing prediction market platforms. Flutter also lowered its FY25 revenue outlook to $16.39-16.99 bln from $16.8-17.71 bln, with the new range landing below estimates and weighing on sentiment.

• Revenue growth was supported by a 9% increase in AMPs to 14.1 mln, driven by organic iGaming momentum and contributions from recent acquisitions like Snai and Betnacional.
• US revenue rose 9% yr/yr, led by 44% iGaming growth. Sportsbook AMP growth improved to +5% (from -4% in Q2), though sportsbook revenue declined 5% due to customer-friendly NFL outcomes and unusually heavy competitor generosity.
• International revenue rose 21% yr/yr, benefiting from acquisitions, while organic iGaming growth remained solid at +10%. Organic sportsbook revenue declined 6%, reflecting tough comps from last year.
• Despite solid top-line momentum, net loss widened sharply, primarily due to the India-related regulatory impairment charge, stepped-up investment, and the previously disclosed Boyd (BYD) payment.
• These developments set the stage for the December launch of FanDuel Predicts, marking Flutter's formal push into prediction markets, following DraftKings' (DKNG) Railbird acquisition and upcoming DraftKings Predictions app, underscoring how quickly this emerging category is becoming strategically important for both operators.
• Encouragingly, management highlighted that stepped-up Q4 investment is gaining traction, with US handle growing +10% quarter-to-date and NBA engagement off to a strong start.

Briefing.com Analyst Insight

The quarter itself was solid, evidenced by strong growth in US and International markets, but the full-range guidance cut is weighing on sentiment and pressuring DKNG as well. The update reinforces two investor concerns already hanging over the space: promotional intensity is rising, especially around the NFL and start of the NBA season, and prediction markets are becoming a growing competitive overhang. Both FLUT and DKNG are now formally pushing into the category, validating the threat posed by fast-growing platforms like Polymarket and Kalshi. In short, while the long-term opportunity remains intact for both operators, investors are reacting to higher promo spend, temporary margin pressure, and a shifting competitive landscape, which is weighing on FLUT and sending peers like DKNG lower in sympathy.