Prediction-Market Threat to Flutter Overrated, Jefferies Analyst Says

A prominent Wall Street analyst is pushing back on one of the gambling industry’s most persistent narratives of the year: that prediction markets are eating traditional sportsbooks alive. Jefferies Equity Research analyst James Wheatcroft placed a “Buy” rating on Flutter Entertainment with a $210 per share price target in a July 26 investor note, arguing the stock’s brutal 65% decline over the past year has far outpaced the actual damage done by upstarts like Kalshi and Polymarket.

Flutter, the parent company of FanDuel, was trading at $100.82 when Wheatcroft published the note. That price reflects a stock that has been hammered since prediction markets exploded in popularity, but the analyst says the selling has been driven more by fear than by fundamentals.

Why Jefferies Sees a “Positive Inflection Point”

Wheatcroft’s core argument is that prediction markets simply haven’t taken the bite out of online sports betting revenue that investors have priced in. “Our deep-dive on market-making in PMs signals incremental profitability,” he wrote, adding that he sees no material cannibalization of Flutter’s sportsbook business from event-contract platforms. The analyst said he expects a “positive reversal” in Flutter’s narrative on the exchanges as that story takes hold with investors.

That’s a notably more optimistic read than what much of the market has been pricing in. Flutter’s stock has been under pressure for the better part of a year as Kalshi and Polymarket ramped up sports-focused event contracts, with weekly volume across U.S. prediction markets reportedly jumping from roughly $100 million a year ago to more than $3 billion currently, according to a Bank of America estimate. Kalshi alone is said to control more than 90% of that volume, and sports bets now make up around 90% of all trading activity on the platform.

A Rough Stretch for Flutter and the Sector

The pressure has been most visible during marquee sports windows. New York state data showed online sports betting revenue actually declined during the NFL playoffs earlier this year — typically one of the industry’s best stretches — even as Kalshi notched its five highest-volume games of the season, including a Chicago Bears comeback win that reportedly became the first single game to top $100 million in trading on the platform. Flutter and DraftKings shares both slid sharply around that data release, part of a broader pullback that has wiped tens of billions of dollars off Flutter’s market capitalization since last summer.

Flutter hasn’t sat still. The company launched FanDuel Predicts in all 50 states through a joint venture with CME Group, which holds a majority stake in the entity and takes half the revenue off the top, aiming to compete directly in the event-contract space rather than cede it entirely. Reports indicate Flutter is committing as much as $300 million in marketing spend to the product this year, with most of that budget loaded into the back half of the year to coincide with the World Cup and the NFL season. Adoption so far has been modest compared to Kalshi, Polymarket and fantasy operators like PrizePicks — download figures reportedly spiked during a promotional push around the NCAA tournament before settling back down — but the infrastructure and capital commitment are now in place for a longer fight.

The Numbers Behind the Bear Case

It’s worth understanding why Wall Street got so spooked in the first place. Flutter still holds an estimated 35% share of the roughly $17.5 billion U.S. online sports betting market, according to research firm Eilers & Krejcik Gaming, and its FanDuel-branded sportsbook remains the largest single revenue driver for the company. But investors have grown increasingly nervous that prediction markets represent a structural threat rather than a passing trend, largely because platforms like Kalshi operate as federally regulated exchanges rather than state-licensed sportsbooks. That distinction lets them reach bettors nationwide, including in states where traditional sports betting remains illegal — a regulatory advantage that has fueled much of the bearish thesis on Flutter and rivals like DraftKings.

Flutter’s troubles haven’t come from prediction markets alone. The company’s international business has also been squeezed by a jump in UK gambling taxes and a ban on money-based online games in India, compounding the pressure from the U.S. market. Chief executive Peter Jackson issued a profit warning months before the stock’s steepest declines, and the company subsequently missed even its own lowered revenue and profit forecasts — a combination that has made some investors skeptical that any single analyst note can reverse the narrative.

Wheatcroft’s note lands at a moment when sentiment on Flutter has been almost uniformly bearish, with the company’s own leadership having issued a profit warning and guided estimates lower earlier this year. Whether Jefferies’ contrarian call marks an actual turning point — or simply a bet that the market overcorrected — will likely become clearer as Flutter reports results through the back half of the year, when prediction-market competition is expected to intensify around NFL and college football season.

For bettors trying to make sense of where the industry is headed, the debate over prediction markets versus traditional sportsbooks is really a question of product breadth — something worth understanding before choosing between a FanDuel Promo Code and a newer event-contract platform. Readers looking to compare the regulatory landscape can also check our breakdown of prediction markets vs. sports betting for a deeper look at how the two models actually differ.