Paddy Power owner Flutter Entertainment, the world's largest online betting company, has sharply cut its full-year profit growth forecast, mainly due to another long winning streak by gamblers that increased its payouts.
Already the biggest operator in the booming US sports betting market through its FanDuel brand, Flutter and its partner CME Group also announced the launch of the FanDuel Predicts app next month to target what it described as a significant growth opportunity in the rapidly expandingevent contracts market.
Event contracts allow investors to bet on the likelihood of specific events occurring, from sports and entertainment to politics and the economy.
Flutter estimated that the investment needed to "aggressively" expand the new business will reduce its group core profit by $40-50m in the fourth quarter and another $200-300m next year.
Flutter cut its full-year 2025 core profit forecast, to $2.9 billion from $3.3 billion, in August, mostly due to the run of customer-friendly sports results in the third quarter that only got worse in the first six weeks of the current quarter.
Bookmakers tend to suffer when gamblers' favourites win and CEO Peter Jackson said Flutter had "complete conviction" in how it calculates odds after sports results have now gone against the Irish-founded group in the US for much of the last year.
Flutter's third-quarter adjusted earnings before interest, tax, depreciation and amortisation (EBITDA) of $478m, up 6% year-on-year, beat the $459m average estimate of 17 analysts with LSEG SmartEstimate.
However, Flutter's full-year outlook for 24% year-on-year earnings growth was well below analysts' expectation for EBITDA of $3.2 billion.
While FanDuel Predicts will allow users to bet on specific events such as election outcomes or the performance of financial markets across almost the whole of the US, it will limit event contracts on sporting events to states where online sports betting is illegal.
As new states legalise online sports betting, Flutter will cease offering sports event contracts there and said it believes the boom in prediction markets will accelerate the legalisation of sports betting that offers tax revenues to states.
Last month Flutter said that it would close 28 Paddy Power shops in Ireland, putting 119 jobs at risk.
Flutter UKI said a total of 57 outlets are to close across Ireland and the UK following a review of its high street estate.
