Betting giant Flutter forecasts 2026 profit far below estimates on US challenges

Core Insights - Flutter, the owner of FanDuel, forecasts modest profit growth for 2026, significantly below analyst expectations due to challenges in the U.S. market and ineffective promotional strategies [1][2] - The company reported a 21% increase in core profit for 2025 but anticipates only a 4% growth in 2026 to $2.97 billion, compared to the $3.5 billion expected by analysts [1][2] Financial Performance - Flutter's shares fell over 9% in after-hours trading following the profit guidance announcement [2] - The guidance reflects lower U.S. customer engagement in Q4 and into 2026, as the company took more money from American football gamblers than its competitors during favorable sports results [2] Market Dynamics - The lack of marquee names in the NFL playoffs led to decreased customer interest in gambling during key games, impacting Flutter's performance [3] - Flutter's CEO acknowledged that the company did not execute its promotional strategy effectively in light of these results [3] Strategic Initiatives - FanDuel, holding a 41% share of the U.S. market, plans to enhance customer rewards and launch a loyalty program in Q2 to better position itself for the 2026/27 NFL season [4] - The company intends to increase investment in its new prediction markets platform, which was launched in late December in collaboration with CME Group [4] Prediction Markets - Prediction markets have gained popularity in the U.S., allowing users to bet on the likelihood of various events, including sports and politics [5] - Flutter expects that investment in the prediction markets will reduce 2026 core profit by the upper end of its previous estimate of $200 million to $300 million [5]