Flutter weighs how much to spend on FanDuel Predicts as it tests prediction market economics

Flutter Entertainment is reassessing how much money it should commit to prediction markets, balancing their capacity to earn profits independently against their usefulness in bringing in future sportsbook customers. The review comes as competition in the US market tightens and operators raise their spending to win share.

Speaking on the company's third-quarter earnings call on Wednesday, November 4, chief executive Dan Taylor said the next few months should give Flutter a better grasp of the economics behind its prediction market business. The central question, he indicated, is whether FanDuel Predicts can stand as a profitable operation or whether its role is mainly to build a customer base in states that may later legalize online sports betting.

Taylor said acquiring customers in prediction markets costs considerably less than in conventional sports betting. The business, however, runs on lower margins, which makes it harder to estimate the long-term value of a customer and to decide how much to spend on acquisition. He added that Flutter sees stronger potential returns in states where sportsbook legalization looks more likely, because users gained through FanDuel Predicts could eventually move to the sportsbook.

FanDuel launched its prediction market in December 2025, initially offering contracts through CME. Taylor acknowledged the product was not competitive when he first examined it closely in the spring. The company then added Crypto.com contracts in June, shifted all sports contracts to Crypto.com in August and released a unified app combining the sportsbook and prediction markets in September. FanDuel recorded $119 million in prediction market trading volume in the third quarter, and Taylor said October activity was almost three times the level of July. Even so, it remains well behind Kalshi and DraftKings in trading activity.

Flutter also earns income by supplying liquidity and pricing contracts on prediction market exchanges. Taylor expects this market-making activity to generate $50 million in revenue and $40 million in adjusted EBITDA in 2026. He named FanDuel's experience pricing same-game parlays and complex betting combinations as an advantage, particularly for markets with correlated events.

Prediction markets are also affecting advertising. Chief financial officer Rob Coldrake said category-wide marketing spending rose more than 60% year on year in September and more than 50% in October, largely because of prediction market operators. Flutter expects marketing intensity to stay at similar levels in 2027.