Key Points
- CFO Rob Coldrake confirmed at the Oppenheimer fireside chat on 11 August that FanDuel spending will run into 2027, going further than he was willing to say at the Q2 earnings call six days earlier.
- Flutter posted a $296m net loss in Q2 2026, with adjusted EBITDA down 45% to $508m; the share price has fallen roughly 67% from its August 2025 peak of $308.60 while Kalshi held 83% of US prediction market exchange volume in June.
- Susquehanna analyst Joe Stauff estimates FanDuel is 9-12 months behind DraftKings in building out its prediction market offering, even as incoming CEO Dan Taylor inherits the second half of 2026 in which the $270m investment actually gets spent.
Rob Coldrake did not say this on the earnings call. That distinction matters. When Flutter’s CFO faced analysts on 5 August, he stayed vague about whether the $270m FanDuel commitment would extend beyond 2026. Six days later, at an Oppenheimer fireside chat hosted by senior analyst Jed Kelly, Coldrake dropped the ambiguity: “It’s sensible to assume that we continue investing into 2027.” That confirmation, volunteered rather than extracted, is the most significant thing Flutter has communicated since the results themselves.
What the Q2 Numbers Actually Say?
In Flutter’s second-quarter financial performance, which was made public on 5 August, there is an indication that the company’s income grew by 3% to $4.33bn, but the EBITDA was down by 45% to $508m. The company reported net losses of $296m compared to gains of $37m in Q2 2025. Revenue forecast for the entire year dropped by $395m to $17.91bn, while EBITDA was reduced.
The $270m sits at the centre of those cuts. Flutter chose to redirect that sum, in EBITDA terms, into strengthening FanDuel’s sportsbook proposition during the second half of 2026. Promotional spend will run closer to 6% of handle in that period, up from 5.6% in H2 2025. US adjusted EBITDA is expected to be roughly break-even in Q3, recovering to around $500m in Q4.
At the Oppenheimer event, Coldrake explained: “This is about focusing on the longer-term US opportunity, which we still think is very substantial for us, and that’s a lot more important than maximising short-term EBITDA.” He set limits on that commitment too: “I don’t think we’ll be doing this in perpetuity; there’s lots of levers that we can pull in time. We’re very confident about our longer-term margin trajectory, but certainly we would foresee continuing this in the short to medium term, particularly given the levels of success that we’re having early on in this investment programme.”
The Customer Case
Jackson’s argument for the spending rested on specific customer data rather than strategy language. He cited 26% more active bettors per NBA Finals game versus 2025, a 40% bigger handle across those games, and 2.3 million customers engaging with FanDuel during the FIFA World Cup. A third of those World Cup users were previously lapsed customers who had drifted away during a period when high-margin results made the product less rewarding. FanDuel posted its highest-ever active months in June and July.
Jackson described the decision as “straightforward,” and drew a deliberate parallel with 2019-20, when Flutter poured money into FanDuel while the impact on near-term earnings drew analyst criticism. He told the Q2 earnings call: “We’re making the same type of decision again today.”
The parallel has limits. In 2019, Flutter was investing in a market expanding state by state, with almost no meaningful competitor in regulated online sportsbooks. The market it is now investing into grew at roughly 5% in the first half of 2026, and the pressure is coming from a sector that does not need a state gaming licence to operate nationally.
A Deeper Problem Flutter Has Not Solved
Prediction markets captured an estimated 27% of all US legal sports-betting volume during the World Cup, up from roughly 9% at the start of 2026. Kalshi alone handled 83% of notional trading volume among CFTC-regulated exchanges in June, with FanDuel Predicts generating just $6m in prediction market revenue for the entire quarter. Flutter expects $50m from the segment for the full year, against category expenses forecast to exceed $200m.
Susquehanna analyst Joe Stauff wrote in a research note following the Q2 results that the numbers point to a specific problem: FanDuel is roughly 9-12 months behind DraftKings in establishing a credible prediction market offering. DraftKings CEO Jason Robins told investors that predictions are “already growing faster than we anticipated,” and since the start of 2026 more than 600,000 customers have engaged with DraftKings’ predictions segment.
Coldrake acknowledged at the Oppenheimer event that FanDuel Predicts has rolled out more slowly than planned. He said Flutter needs to assess where the product stands by year-end before deciding how much to commit to it in 2027, meaning the total 2027 investment figure remains genuinely open even now. Flutter is moving all FanDuel Predicts sports and novelty contracts from CME to Crypto.com ahead of the NFL season, a switch Coldrake said will expand the product catalogue and allow new contracts to launch faster.
Jackson maintained that cannibalisation in regulated sportsbook states remains limited and that the data does not show meaningful customer crossover between prediction platforms and FanDuel. His argument is that the performance gap has more to do with FanDuel’s own execution failures in late 2025 than with customers switching to Kalshi.
The Share Price and the Balance Sheet
Flutter’s share price reached $308.60 on 28 August 2025. At the time of the Oppenheimer fireside chat, it was trading around $99, having recovered about 5% in the previous 24 hours but still down nearly 12% over the prior month. Following Q2, Macquarie, Citigroup and Wedbush all lowered their targets. Oppenheimer moved from $135 to $120, holding its outperform rating.
Investor Michael Burry, who predicted the collapse of the US housing market in 2007, disclosed he had more than doubled his Flutter stake at an average cost of around $90 per share. He described it as a “fat pitch,” arguing that regulatory action against prediction markets would ultimately benefit licensed sportsbooks. Whether or not that view proves correct, Flutter’s net debt of $10.48bn and leverage ratio of 4.3x at the end of Q2, against a stated target range of 2 to 2.5x, leaves little room for an investment programme that might expand further in 2027. The buyback is paused. Coldrake said the priority is to bring leverage down to a figure beginning with 3 by year-end.
Taylor Gets the Keys
Dan Taylor takes over as group CEO on 1 October, ending Jackson’s nine-year tenure. Taylor has led Flutter International since 2020 and assumed expanded oversight of FanDuel after Amy Howe’s departure in May. Jackson has been deliberate about crediting Taylor with shaping the sportsbook improvement plan currently in motion.
At the Oppenheimer event, Jackson framed the spending commitment as a transfer of advantage: “I’m taking a bit on the chin, but for Dan, it’s a great gift to have that opportunity to invest behind the success we are seeing at the moment in the business.” He added: “He may talk a bit faster than me, but I think we’re trying to achieve very similar things. And now I look forward to seeing him be the most successful CEO the business has had.”
Taylor will take charge one week before an NFL season that arrives later than Flutter originally modelled. That scheduling shift alone costs the company $50m in adjusted EBITDA in 2026 guidance.
Expert Analysis
Stauff’s Susquehanna note flagged that the Q2 numbers point to three compounding pressures: doubts about customer retention, rising competition ahead of the NFL season, and FanDuel’s lag in prediction markets. He maintained a positive rating but cut his price target from $121 to $115, citing “tangible progress on FanDuel’s fix, the immediate replacement of Flutter’s CEO and a steady international portfolio” as reasons for holding the view. Macquarie analyst Chad Beynon moved his target from $190 to $160. The NFL season is the test everyone in the market is waiting for. If 6% promotional spend converts into measurable ARPU growth and market share gains entering 2027, Coldrake’s commitment to continuing that investment next year will look well-judged. If the sportsbook improvement plan stalls while Kalshi and DraftKings extend their prediction market lead, Flutter will face a much harder conversation about whether this spending is tactical or structural, and that question will land directly on Taylor’s desk.
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