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FanDuel owner Flutter says it is willing to spend more to compete for customers heading into the NFL season, with management targeting promotional generosity closer to 6% of handle. The move stands out because key rivals are not all following the same playbook: DraftKings says the extra spending is manageable, Penn Entertainment is pulling back from lower-value segments, and BetMGM is keeping a more cautious tone.
Flutter said the push will cost about $270 million in adjusted EBITDA. CFO Rob Coldrake told investors promotional generosity should run “closer to 6%” of handle, below the 7% some analysts had modeled but above FanDuel’s 5.4% promotional rate in Q2, which was up 140 basis points year over year.
Flutter accepts lower near-term profit to defend FanDuel
The heavier spend comes with weaker guidance. Flutter cut group revenue guidance by $395 million to a midpoint of $17.91 billion and reduced adjusted EBITDA guidance by $210 million to $2.655 billion. In the U.S., EBITDA was $760 million, down 22% from the prior quarter.
FanDuel’s Q2 sportsbook revenue fell 15% to $1.039 billion, while U.S. revenue slipped 6% to $1.683 billion. Even so, FanDuel retained 39% of sportsbook gross gaming revenue share and 27% of iGaming share, according to the company figures cited in the report.
Flutter shares closed down 11.5% at $92.91 on results day. The company also reported a $296 million net loss and leverage of 4.3x. Its revised guidance also includes a $50 million EBITDA hit because the NFL season starts a week later than the company had modeled.
DraftKings, Penn and BetMGM are responding differently
DraftKings CEO Jason Robins described rivals’ heavier spending as “a blip on the radar” and said the company still has room to spend more if the data supports it. DraftKings kept its full-year guidance unchanged at $6.5 billion to $6.9 billion in revenue and $700 million to $900 million in adjusted EBITDA. The company also said July handle rose 20% year over year.
Penn, by contrast, shifted marketing away from lower-value and unprofitable segments. It reported a $9.5 million digital loss, its narrowest since scaling into online sports betting, while total revenue increased 5.2% to $1.857 billion.
BetMGM reported Q2 net revenue up 3% to $711 million, but adjusted EBITDA fell 15% to $74 million. Its online sports revenue was flat at $228 million on 2% handle growth.
What the numbers say about the market
State data in the report showed why operators are weighing promos so carefully. New York handled a record $2.26 billion in wagers in June, up 36.4% from a year earlier, but revenue fell 43.3% to $117 million as hold dropped to 5.19%. New Jersey also posted a June handle record of $917.2 million, up 16%, while revenue fell 37.7% to $57.3 million on a 6.24% hold.
For players, the main takeaway is that football-season competition appears to be intensifying, even as operator profits remain sensitive to promotional costs and monthly hold swings. Readers should watch upcoming earnings and early NFL-season results for evidence of whether FanDuel’s higher-spend approach changes market share or prompts a broader response. As always, gamble responsibly.
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Source: As reported by sportshandle.com.
