Flutter Entertainment PLC (LSE:FLTR, NYSE:FLUT) is at a potential inflection point as concerns around prediction market competition begin to fade, according to Jefferies analysts, who highlighted improving online sports betting trends and potential new sources of profitability.
Jefferies wrote that the market’s focus on prediction markets cannibalising online sports betting had driven a 65% decline in Flutter’s share price since last summer and contributed to a valuation de-rating from 15 times enterprise value to EBITDA to 8 times
The analysts argued that the narrative around prediction market disruption is beginning to change, with online sports betting handle growth recovering and limited evidence that prediction markets are taking meaningful share in states where online sports betting is legal. “The powerful, but misplaced narrative that PMs will cannibalise OSB has started to unravel,” Jefferies wrote, adding that prediction markets could instead provide incremental opportunities for Flutter through market-making activity, FanDuel Predicts and regulatory leverage. Jefferies identified market-making as the largest potential opportunity, estimating a $340 million annual EBITDA contribution if Flutter captures a 25% share of Kalshi parlays. The analysts noted that this opportunity is significant compared with Flutter’s $970 million fiscal 2026 US EBITDA guidance, while consensus estimates currently assume no positive contribution from prediction markets and instead reflect around a $300 million investment.
The firm also highlighted potential upside from FanDuel Predicts, which Jefferies estimated could contribute an additional $150 million in EBITDA over the coming years. The analysts also pointed to potential regulatory benefits, including the ability for prediction markets to support broader online sports betting regulation and limit state tax increases. Jefferies estimated that prediction markets would need to reduce online sports betting handle by around 50%…