Flutter Entertainment, the parent company for FanDuel, released its Q1 earnings on Wednesday. The report points to a single-digit cannibalization impact that prediction markets are currently having on its US-facing sportsbook operations.
“We continued to see only a limited cannibalization impact from prediction market operators on our sportsbook growth, consistent with our prior estimate of a low single-digit percentage effect on handle growth,” states the company on page 4 of its most recent earnings release. “We believe this limited impact reflects the fundamental differences in product propositions between sportsbooks and prediction market platforms, customer age profiles and concentration of prediction market activity among entertainment-first and low-value users.”
READ: Q1-2026 FLUT earnings presentation (May 6, 2026)
The reported impact of prediction market cannibalization on state-regulated US sportsbooks is in line with a recent study published by gaming research firm Eilers & Krejcik Gaming. According to EKG, prediction markets are enjoying oversized market influence in underserved states like California and Texas.
Overall, costs associated with FanDuel’s recent launch in the state of Arkansas plus unfavorable sports outcomes impacted the publicly traded firm’s bottom line for the quarter. Guidance for adjusted profits during the 2026 fiscal year was downgraded from $2.97B to $2.87B as a result.
Despite this, FanDuel sees potential in its market making capabilities via FanDuel Predicts, a service that has now been fully integrated into the app’s sportsbook software – but only in states that don’t currently offer FanDuel Sportsbook. Customers in states where FanDuel Sportsbook is formally regulated must still create a separate login – and maintain a separate balance – for the prediction product.
The company’s regulated iGaming vertical continues to outshine its sportsbook counterpart. For the quarter FanDuel iGaming revenues were up 19% year-over-year. By comparison, sportsbook revenue only increased by one percent versus Q1-2025.
Still, FanDuel is relying on a strong performance of its sportsbook products in the next two fiscal quarters. “The 2026/2027 NFL season launch will be a major milestone, with many improvements also planned for the FIFA World Cup,” according to Flutter’s official presentation (page 6).
Prediction market exchanges are creating more trading products while online sportsbooks and casinos remain fiscally attached to their core businesses. During Robinhood’s Q1 earnings call last week, Chairman Vlad Tenev specifically noted that many of the exchange’s customers are transitioning to viewing their trading balances as a personal bank account.
Robinhood’s “Gold” premium subscriber base has now eclipsed 4 million, and its Trump Accounts program is expected to bring in more than 10 million eventual investors – as newborns. State-regulated online sportsbooks in the United States have a minimum age requirement of 21, but prediction market apps can accept traders who are 18+ throughout the country.
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