FanDuel is bringing in more revenue, but parent company Flutter Entertainment is spending heavily to maintain its position in the U.S. gambling market. Flutter reported a 6% increase in total U.S. revenue to $1.45 billion in Q3, although profitability took a hit. Higher marketing expenses, prediction market investments, and expansion into Alberta had an impact on Flutter’s results during Q3.
Flutter’s Q3 earnings report showed U.S. adjusted EBITDA falling 94% year over year to just $3 million. That’s a major decline for a business that continues to attract users and generate more betting activity.
Part of the problem is the cost of competing for those users. FanDuel boosted its NFL spending ahead of the football season, increasing promotional efforts to maintain its position atop the North American market.
Flutter also committed resources to its prediction market platform and launched in Alberta’s newly regulated online gambling market. Those investments contributed to higher expenses, with U.S. sales and marketing costs increasing 16% year over year.
Despite the decline in profits, FanDuel’s sportsbook showed encouraging signs. Sports betting revenue increased 4% compared to last year, while betting handle climbed 13%. Unfavorable sports results prevented revenue from growing at the same pace as wagering activity.
In other words, bets favored by the public hit at a rate that affected the house in a negative way.
The online casino also performed well, with revenue increasing 8% and average monthly players rising 24%. That helped support FanDuel’s overall growth during a challenging quarter for sports betting margins.
Flutter had previously expressed optimism about growth during NFL season. The latest figures suggest users are responding positively to the enhanced promotions. However, there’s also the chance that this uptick is merely due to a busy time on the sports calendar. It will be interesting to see the results in the upcoming quarters.
FanDuel will look to carry its momentum into the final quarter of 2026, with the NFL season providing plenty of opportunities to generate revenue through higher betting activity. The company will be hoping for more favorable sports results after bettor-friendly outcomes affected its margins during Q3.
Flutter also faces pressure to improve profitability after lowering its full-year financial outlook. The company now expects $17.61 billion in annual revenue and $2.49 billion in adjusted EBITDA, reflecting challenges across its global operations.
Looking ahead to 2027, FanDuel will need to balance customer acquisition with the cost of retaining its existing user base. Competition from other sportsbooks and emerging prediction markets could make that challenging, especially with advertising expenses to deal with the more competitive environment.
