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Industry Trend - Major sports leagues in America are attempting to limit betting activities susceptible to manipulation [1] - Limiting such activities is more complex than it appears [1]

Sports betting stock Flutter Entertainment PLC (NYSE:FLUT) is falling sharply today, last seen down 8.8% at $213.87, after mixed third-quarter results. Adjusted third-quarter earnings of $1.64 per share handily beat analysts' anticipated 13 cents per share, though revenue of $3.79 billion missed estimates. What's really weighing on the stock, however, is the FanDuel parent's lowered full-year guidance, which it attributed to "unusually customer-friendly sports outcomes," as well as tax adjustments in Illino ...

Financial Data and Key Metrics Changes - Group revenue increased by 17% year-over-year, while adjusted EBITDA grew by 6% in Q3 2025 [5][19] - The company reported a net loss of $789 million for the quarter, compared to a loss of $114 million in the prior year, primarily due to a non-cash impairment charge of $556 million related to regulatory changes in India [18][19] - Adjusted earnings per share grew by 29%, while loss per share increased to $3.91 from $0.58 in Q3 2024 [18] Business Line Data and Key Metrics Changes - In the US, revenue was up 9%, driven by exceptional iGaming growth of 44%, while sportsbook revenue declined by 5% [18] - International revenue increased by 21% year-over-year, with acquisitions contributing 18 percentage points to this growth [19] - iGaming performance showed strong organic growth of 10%, particularly in Turkey and Italy [12][19] Market Data and Key Metrics Changes - Average monthly players engaging with products exceeded 14 million, contributing to revenue growth [5] - The company maintained a 47% market share in net gaming revenue (NGR) in September, despite competitive pressures [11][30] - The international division's revenue reached $2.4 billion, reflecting a 21% increase, with strong performance in Turkey and Italy [19] Company Strategy and Development Direction - The company is strategically positioning FanDuel to capture emerging prediction markets with the launch of FanDuel Predicts in December [6][17] - The focus remains on state-regulated sports betting and iGaming as the most valuable long-term opportunities in the US [8] - The company plans to invest significantly in FanDuel Predicts, anticipating an incremental EBITDA cost of $40-$50 million in Q4 2025 and $200-$300 million in 2026 [23][24] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the underlying business performance despite a reduction in full-year guidance due to customer-friendly sports results [5][21] - The competitive landscape has seen heightened generosity from competitors, impacting initial NFL season performance, but management remains optimistic about long-term growth [11][30] - The company is closely monitoring the regulatory environment in India and remains engaged with policymakers regarding potential gaming tax increases in the UK [15][16][60] Other Important Information - The company completed share repurchases totaling $225 million in Q3 and plans to continue the program into 2026, with a commitment to return $5 billion over the coming years [20][21] - The integration of recent acquisitions is progressing well, with a focus on delivering synergies and enhancing the iGaming proposition [13][14] Q&A Session Summary Question: Can you elaborate on the planned investment for FanDuel Predicts? - Management expressed excitement about the product and emphasized a disciplined approach to customer acquisition, monitoring CAC to LTV dynamics closely [25][26] Question: How widespread was the competitive generosity seen at the start of the NFL season? - Management noted that while there was heightened generosity, they maintained a disciplined investment posture and were pleased with their market share performance [30][31] Question: What is the outlook for trading in September and into Q4 in the US? - Management reported strong momentum into Q4, with double-digit handle growth and a positive start to the NBA season [30][31] Question: Can you provide insights on the prediction markets and regulatory engagement? - Management highlighted extensive engagement with stakeholders and optimism about accelerating state legalization of sports betting [34][35] Question: How do you view the competitive landscape with new partnerships like ESPN and DraftKings? - Management acknowledged the competitive dynamics but emphasized their strong product offering and successful partnerships, particularly with Amazon [56]

gambling is in a supertrend & the biggest sports betting apps actually lose money because of how much they spend advertisingonline casinos are going to eat substantial share of revenue from physical locations, especially ones that provide a differientiated user experience ☘️🍀Night Owl (@NightOwlCapital):Two years later..- US sports betting +50% (just the legal reported number)- 0DTE SPX options ~40% of volume in 2023 to >60% in 2025- Online casino revenue growing +30% annuallyThe speculative majority grows. ...

Regulatory Landscape & Compliance - CFTC regulates prediction markets, including event contracts on elections, sports, and more [1][11] - Prediction markets are designated contract markets and registered with the CFTC, implying obligations to prevent manipulation and abusive trading [11][17][18] - Failure to comply with CFTC obligations results in liability for the organization, not just individual participants [18] - Common compliance solutions include training and awareness programs, especially for those involved in events covered by prediction markets [9][10] Market Growth & Trends - Prediction markets have experienced rapid growth, expanding from elections (e.g, KALSI, Polly Market) to sports and other areas [2][3] - Prediction markets are becoming a permanent asset class, influencing how people follow events like elections [19][20] Risks & Challenges - Insider trading is a significant risk in prediction markets, similar to equity, crypto, and sports betting markets [8][9] - There are risks associated with individuals betting large sums (e.g, liquidating 401Ks) on prediction market outcomes [13][14] - Recent cases involving NBA players and major league pitchers highlight the risks of inappropriate gambling and performance manipulation [5][6] Risk Mitigation & Deterrence - Strong policies and procedures, along with enforcement cases, are crucial for deterring misconduct in prediction markets [15][16] - Enforcement actions raise awareness about the risks of participating in these markets [15] - Transparency in prediction markets allows for quick detection of anomalous activity [7][8]

Financial Data and Key Metrics Changes - In Q3 2025, the company generated $1,144 million in revenue, representing a 4% year-over-year growth [16] - Adjusted EBITDA for Q3 was negative $127 million, impacted by customer-friendly sports outcomes that affected revenue by over $300 million [16][10] - The company revised its fiscal year 2025 revenue guidance to $5.9 billion-$6.1 billion and adjusted EBITDA guidance to $450 million-$550 million, reflecting a growth of 24%-28% compared to fiscal year 2024 [18] Business Line Data and Key Metrics Changes - Sportsbook handle increased by 10% year-over-year to $11.4 billion, with strong engagement driven by promotions [17] - iGaming net revenue growth accelerated to 25% year-over-year, marking the fastest growth since Q1 2024 [8] - The parlay handle mix surged, with year-over-year gains of 800 basis points for NFL and 1,000 basis points for NBA season to date [8] Market Data and Key Metrics Changes - NFL handle grew 13% season to date, while NBA handle increased by 19% season to date, indicating an acceleration in growth compared to previous quarters [7] - Total sportsbook handle increased by 17% year-over-year in October [8] Company Strategy and Development Direction - The company is optimistic about future growth, driven by exclusive marketing agreements with ESPN and NBCUniversal, and the upcoming launch of DraftKings Predictions [5][12] - The focus will be on states without existing online sports betting, aiming to capture a new customer base and revenue stream [12][41] - The share repurchase program has been increased from $1 billion to $2 billion, indicating confidence in future cash flow [14] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the impact of sports outcomes on financial results but emphasized that over time, these variances typically normalize [10][24] - The company remains confident in its long-term financial potential, citing strong customer retention rates and product enhancements driving engagement [5][7] - Management expressed excitement about the potential of DraftKings Predictions to expand the total addressable market [12] Other Important Information - The company is developing a Spanish-language app to cater to a growing demographic ahead of the 2026 World Cup [9][93] - The company has made significant progress in growing its sportsbook hold percentage and net revenue margin, primarily due to an increasing parlay handle mix [9] Q&A Session Summary Question: OSB hold percentage and confidence in future swings - Management acknowledged the frustration with recent outcomes but noted that over time, results tend to normalize, and the business model remains strong [21][24] Question: Value addition of new board member Greg Went - Management expressed excitement about Greg Went's expertise in gaming investment and his potential contributions to the company's strategy [25] Question: Volatility of hold due to parlay increases - Management indicated that while parlay betting can increase volatility, the focus remains on maximizing long-term value while managing risk appropriately [29][30] Question: Profitability of prediction markets - Management plans to adopt a conservative approach to investment in prediction markets, focusing on data-driven decisions and shorter payback periods [32][33] Question: Conversations with regulators regarding prediction markets - Management emphasized the importance of relationships with regulators and the strategic focus on states without existing online sports betting [38][41] Question: Significance of ESPN deal - Management highlighted the long-standing relationship with ESPN and the potential for significant customer engagement through integrated marketing efforts [51][52] Question: Breakdown of the $300 million impact on guidance - Management indicated that most of the impact was due to sports outcomes, with some additional considerations for prediction market spending [62] Question: Investment strategy for next year - Management stated that there would be minimal incremental investment in core business areas, with a focus on new states and AI technology [70] Question: Customer acquisition through Spanish-language app - Management expressed optimism about the potential for the Spanish-language app to capture a significant share of the growing Hispanic demographic [93][95] Question: Attribution of growth in parlay mix - Management attributed the growth in parlay mix to product innovation and effective promotional strategies [98][100]

Core Insights - PENN Entertainment and ESPN have mutually agreed to terminate their U.S. sports betting contract, effective December 1, 2024, after a partnership that began in August 2023 [1][6]. Group 1: Partnership Details - The partnership aimed to enhance PENN's product offerings and create a cohesive ecosystem with ESPN, but both parties decided to amicably wind down the collaboration [3]. - ESPN's involvement in the sports betting market through this partnership was valued at approximately $2 billion [6]. Group 2: Future Strategy - PENN plans to rebrand its online sports betting (OSB) offering to theScore Bet®, targeting a launch date of December 1, 2025, coinciding with the expected launch of sports betting in Missouri, pending regulatory approvals [4]. - TheScore Bet brand currently operates in Ontario and will leverage connectivity with theScore media app, which has around 4 million monthly active users in North America [4]. Group 3: User Engagement and Transition - ESPN's collaboration with PENN resulted in over 2.9 million new users entering the PENN ecosystem, with a notable increase in first-time bettors during the fall [8]. - All outstanding payments to ESPN will cease in the fourth quarter of 2024, and ESPN will assist PENN in transitioning to theScore Bet [10].

RT Charlie Bilello (@charliebilello)Americans bet over $148 billion on sports last year, which is more than they spent on movies, books, concerts and sports tickets - combined. ...

Social Impact - Sports betting, while popular and entertaining, is emerging as a potentially harmful social trend [1]