Customer Friendly NFL Outcomes Lead to FanDuel Losses

NFL bettors experienced a winning few months as the regular season wound down, and Flutter Entertainment, the parent company of FanDuel, was just one gaming company taking the brunt of those outcomes, reporting losses in the hundreds of millions.

Public Beats the Books

There’s an old adage that says the house always wins, but the mercurial nature of NFL betting favored the betting public for a change, and that has led to Flutter revealing that “very unfavorable US sports results” have caused a $370 million revenue loss that is expected to be more of an aberration than a projected pattern.

Flutter Entertainment had previously forecasted revenues of between $6.05 billion and $6.25 billion; however, the public’s spate of winning wagers has caused the company to revise its estimates to $5.78 billion in revenue for the online sports betting powerhouse.

A Double-Edged Sword

The industry’s reliance on parlays and same-game parlays as a driving force in revenues recently proved to be a boon for bettors and a financial blow to the sports betting operators like FanDuel. Nevertheless, the low-risk, high-reward nature of parlay betting will continue to be a sector that FanDuel and its competitors will push through bonuses and odds boosts because it has historically proven to be a revenue-producing strategy.

November and December were historically favorable months for the average sports bettor who leans heavily on favorites. Flutter released a statement deeming the 2024-25 NFL season “the most customer-friendly since the launch of online sports betting with the highest rate of favorites winning in nearly 20 years.”

FanDuel Not Alone

FanDuel is not alone in revealing its disappointing results, as all sportsbooks will likely be posting similarly negative revenues. DraftKings recently announced a revenue and earnings downgrade off the public’s winning months of November and December.

Sports betting analysts at Regulus Partners believe the anomaly was inevitable but temporary and anticipate a series of similar negative reports from others in the industry.

“After nearly four years of structural margin improvements, a brief run of bad luck was almost inevitable, and Flutter is largely right to confirm underlying guidance, in our view,” Regulus said.

“However, the problem with black swans, both in ornithology and in risk metaphor, is that they are not as rare as people think.

“FanDuel’s leading same-game parlay mix probably exposes them more to this run of bad results for bookmakers. But we doubt FanDuel will be the only US betting revenue disappointment or profit warning.”

The Parlay Problem

Because parlays have become such a money driver in the industry, the reliance on favorable outcomes has become the bread and butter of sportsbooks around the globe. However, when favorites begin covering, parlays that have several winning legs begin cashing at an unprecedented rate.

Regulus Partners stated, “The NFL is by far the worst example […], with [around] 15% of US wagering balanced upon fewer than 300 games played over just 18 weeks—with this level of risk concentration, black swans are bound to appear in flocks.”

Off the heels of this most recent report, shares of Flutter Entertainment were down 1.28% to $251.86 per share in early trading on Wednesday.