The Super Bowl is supposed to be the highlight of the calendar for gambling companies. This year, though, a cloud has descended over the industry as the big game approached. The stock of Flutter Entertainment Plc, which runs one of the most popular US gambling apps, FanDuel, is on an eight week skid, the longest in 23 years. It’s main competitor, DraftKings, is trading around the lowest levels since 2023, and is down more than 60% from its all-time high five years ago. Most Read from Bloomberg The mat ...

Core Insights - The legalization of sports betting in the U.S. has led to significant market growth, with over $150 billion wagered in 2025, but profitability remains a challenge for many operators [1] Company Summaries 1. DraftKings - DraftKings is the closest to achieving profitability in the digital sports betting space, posting $0.16 in annual EPS in 2025, marking its first year of profitability after five years of losses [12] - Revenue reached $5.46 billion, with quarterly earnings growth of 185% year-over-year, indicating strong operational performance [12] - The stock has seen a 26% decline over the past year, but analysts project a fair value of $45, suggesting a 47% upside if the company can maintain its profitability [13][14] 2. Flutter Entertainment - Flutter Entertainment, the parent company of FanDuel, is the largest operator in the group with a market cap of $30.6 billion and revenue of $15.4 billion [10] - The company reported $3.82 in annual EPS for 2025, down 37% from the previous year, but remains profitable [10] - Analysts see a fair value of $285 for the stock, implying a 63% upside, supported by its global diversification and established profitability [11] 3. Caesars Entertainment - Caesars operates over 50 casino properties and runs Caesars Sportsbook, but reported an annual EPS of -$0.95 in 2025, despite an improvement from -$1.26 in 2024 [7] - The stock has dropped 35% over the past year, trading at $22.37, with analysts maintaining a target of $32, indicating a potential 43% upside if the company can stabilize its digital losses [8] 4. MGM Resorts - MGM Resorts is the only company on the list with a positive one-year performance, up 3.7%, generating $17.3 billion in revenue [5] - The profit margin is low at 0.4%, and earnings fell 70% year-over-year in Q3 2025, indicating operational stress [6] - The stock trades near its 200-day moving average at $34.10, with a modest upside to the $42 analyst target [6] 5. Penn Entertainment - Penn Entertainment reported an annual loss of -$0.59 in 2025, an improvement from -$1.62 in 2024, but remains unprofitable [3] - The stock trades at 0.3x sales and below book value, suggesting market skepticism regarding its ESPN partnership [4] - Analysts have set a target of $19 for the stock, implying a 33% upside, but the company needs to demonstrate its ability to convert ESPN's reach into profitable customer acquisition [4]

Group 1: Fox and Flutter's FanDuel - Fox has the option to acquire an 18.6% stake in Flutter's FanDuel, which holds over 30% market share in U.S. sports betting [2][3] - The option originated from Fox's 2019 investment in The Stars Group, which was later folded into FanDuel after Flutter's acquisition [3] - CEO Lachlan Murdoch confirmed Fox's intention to exercise the option, with a potential FanDuel valuation around $35 billion [4] Group 2: Market Reactions and Other News - Analysts view the FanDuel option as a hidden asset value for Fox, with varying opinions on the timing for exercising the option [5] - LifeMD and GoodRx stocks rose after adding Novo Nordisk's Wegovy weight-loss pill to their offerings, priced at $149 per month [5] - Samsung and SK hynix are expected to raise server memory prices by up to 70% in Q1 due to increased AI demand [6]

Group 1 - The core viewpoint is that most Wall Street analysts believe prediction markets do not pose a threat to the business model of FanDuel, which is a key asset for Flutter [1]

Core Insights - The Zacks Gaming industry is facing challenges due to strained consumer spending, rising regulatory complexity, and compliance costs, but is benefiting from increased gaming revenues in Macau and strong demand for sports betting [1][3][4][5][6] Industry Overview - The Zacks Gaming industry encompasses companies that operate integrated casinos, hotels, and entertainment resorts, as well as those providing technology products and services in lotteries, electronic gaming, and sports betting [2] Key Themes - **Consumer Spending Pressure**: The U.S. gaming industry is experiencing reduced discretionary spending due to persistent inflation and rising costs, leading to more conservative spending habits among consumers [3] - **Regulatory Complexity**: The expansion of sports betting and iGaming is creating a fragmented regulatory environment, increasing compliance costs and compressing margins for operators [4] - **Macau Gaming Revenues**: Macau's gaming revenues rose 14.4% year-over-year to approximately MOP21.09 billion ($2.63 billion), indicating a steady recovery in the mass-market segment [5] - **Sports Betting Growth**: The legalization of sports betting across multiple states has significantly contributed to industry growth, with various digital platforms facilitating wagers [6] Industry Performance - The Zacks Gaming industry has underperformed the S&P 500 Index, rising 7.2% over the past year compared to the S&P 500's 15.7% growth [10] - The industry's current trailing EV/EBITDA ratio is 18.64, consistent with the S&P 500, with historical trading ranges between 14.16X and 28.46X over the past three years [13] Notable Companies - **Las Vegas Sands (LVS)**: Benefiting from strong travel demand and improved conditions in Macau and Singapore, with a 22% share price increase over the past year and a 10.1% rise in 2026 earnings estimates [16][17] - **Rush Street Interactive (RSI)**: Achieved record revenues with a 20% year-over-year increase, supported by a 46% surge in North American online casino monthly active users, and a 38.3% share price increase [20][21] - **Brightstar Lottery (BRSL)**: Strengthened its balance sheet post-IGT Gaming divestiture, with a 5% increase in 2026 earnings estimates despite a 19.9% decline in share price over the past year [24]

Company Comparison - The report differentiates FanDuel from Polymarket or Kalshi [1] Industry Analysis - The analysis focuses on the semantics of different platforms in the industry [1]

Group 1: Analyst Ratings Adjustments - JPMorgan has significantly reduced its price target for Evoke PLC (EVOK) from 66p to 34p, indicating a nearly 50% decrease in outlook for the company [3][10] - The price target for Flutter Entertainment (FLTR, FLUT) has been lowered from 27,100p to 25,300p, reflecting cautious sentiment in the entertainment and gaming sector [4][10] - For EPR Properties (EPR), JPMorgan adjusted its target price down to $58 from $65, following a previous increase in September 2025 [5][10] - Daiwa Capital Markets has made a minor adjustment to Deere & Co (DE), lowering its target from $530 to $520 amid mixed analyst sentiments [8][10] Group 2: Geopolitical Concerns - A Taiwanese minister has warned that the ongoing tensions between China and Japan could last for another year, which may impact regional stability and trade [7][10]

Core Insights - Flutter Entertainment plc (NYSE:FLUT) is recognized as one of the best consumer cyclical stocks, primarily due to its leading online betting service, FanDuel, which has over 12 million users in the US [1] Analyst Recommendations - As of November 28th, 19 out of 27 analysts recommend buying Flutter Entertainment plc shares, with 6 ratings as Strong Buy and 2 as Hold. The average price target is set at $307.59 [2] Recent Analyst Reports - A recent report from Citi on November 29th lowered the price target for Flutter Entertainment plc from $340 to $320 while maintaining a Buy rating. This adjustment was influenced by the UK government's announcement to increase the online gaming tax from 21% to 40% [3] - UBS also revised its price target for Flutter Entertainment plc from $360 to $340 on November 20th, indicating that the stock could re-rate following the tax announcement as focus shifts back to its fundamentals [3] Earnings Call Insights - During the third-quarter earnings call, Flutter Entertainment's CFO discussed the impact of wager fees in Illinois, noting a reduction in the number of bets but an increase in handle per bet. The company is closely monitoring market data to assess future implications [4] - The CFO expressed optimism about potential regulatory developments that could help mitigate tax impacts in high-tax jurisdictions [4]

Core Viewpoint - Flutter Entertainment PLC, a major player in the global sports betting and gaming industry, has received a "Buy" rating from Benchmark despite a price target adjustment from $310 to $285, indicating continued investor confidence in the company's future growth [1][2][6]. Group 1: Stock Performance - As of December 1, 2025, Flutter's stock price was $208.81, reflecting a 4.45% increase on that day [5][6]. - The stock has fluctuated between $202.01 and $210.49 on the same day, with a yearly high of $313.69 and a low of $189.33 [5]. - Flutter Entertainment has a market capitalization of approximately $36.7 billion and a trading volume of 1,593,432 shares [5]. Group 2: Institutional Investor Activity - Boston Partners increased its investment in Flutter by 15% during the second quarter, now holding 5,011 shares valued at $1.43 million, indicating a positive outlook from institutional investors [2]. - Bank of New York Mellon Corp significantly increased its stake in Flutter by 120.1%, now owning 454,660 shares valued at approximately $129.92 million, suggesting strong confidence in the company's growth potential [3]. - Jefferies Financial Group Inc. also raised its holdings in Flutter by 5.4%, now possessing 18,163 shares worth around $3.99 million, further supporting the notion of optimism among institutional investors [4].

Core Insights - The U.S. online sports betting market is rapidly expanding, intensifying competition among leading digital gaming platforms like DraftKings Inc. and Flutter Entertainment plc [1][2] - Both companies are enhancing their product offerings and customer engagement strategies to capture a larger market share [2][12] Group 1: DraftKings Overview - DraftKings is focusing on product enhancement and user engagement, leading to solid revenue gains in Q3 2025, with a notable increase in iGaming content [4][5] - The company reported a 25% year-over-year growth in iGaming net revenues and a 17% increase in total sportsbook handle in October [5][7] - DraftKings anticipates continued growth driven by product innovation and expansion into new jurisdictions [7] Group 2: Flutter Overview - Flutter, through its brand FanDuel, is experiencing steady growth with over 14 million average monthly players and a 17% year-over-year revenue increase in Q3 2025 [8][9] - The company is enhancing customer engagement through improved pricing and personalization, contributing to a balanced performance from both U.S. and international operations [8][11] - Flutter expects to benefit from ongoing digital gaming adoption and long-term engagement trends as it continues to innovate its product ecosystem [12] Group 3: Stock Performance & Valuation - DraftKings' share price has outperformed Flutter's in the past six months but remains below the Zacks Gaming industry average [13] - DraftKings is trading at a premium compared to Flutter based on a forward 12-month price-to-sales ratio [14] - Earnings estimates for DraftKings show significant year-over-year improvements of 173.3% and 100.4% for 2025 and 2026, respectively, while Flutter's estimates reflect more modest growth of 8.1% and 39.1% [17][19]