
FanDuel already dominates U.S. sports betting, but Flutter’s global footprint, iGaming expansion, and disciplined strategy suggest its $50 billion empire is still in the early innings.
This piece was written by Joe Pompliano and first published in his 'Huddle Up' newsletter. You can also watch the full interview here.
When the U.S. Supreme Court struck down PASPA in 2018, the U.S. sports betting market went from a legal curiosity to one of America’s fastest-growing entertainment categories. The American Gaming Association estimates that Americans will wager $30 billion during the 2025 NFL season alone. Additionally, 22% of the population, including 48% of men aged 18 to 49, now have an active online sportsbook account.
Dozens of companies have attempted to capitalize on this trend. DraftKings has succeeded at scale, while BetMGM, Caesars, ESPN Bet, and Fanatics fight for scraps. But at the center of that surge sits FanDuel, the clear U.S. leader in sports betting.
Over the last decade, FanDuel’s parent company, Flutter Entertainment, has transformed from a regional Irish bookmaker into the world’s largest online sports betting and iGaming operator. With FanDuel leading the U.S. market with a commanding 43% market share, Flutter has positioned itself as the dominant force in the rapidly growing online sports betting industry — and investors have taken notice.
After moving its primary listing to the New York Stock Exchange (NYSE) in May 2024, Flutter’s stock ($FLUT ) has appreciated 47% over the last 16 months. That’s a higher return than every other major U.S. sportsbook and also the S&P 500’s 27% gain.
Flutter has done an incredible job using its size and scale to acquire customers, improve its margins, and cross-promote content. The company’s approach to product innovation (think: Same Game Parlays) has also catalyzed industry-wide adoption and consumer uptake. But with 30-35% of the U.S. population still lacking access to online sports betting, many believe Flutter still has considerable room for financial growth.
So today, we’ll break down how Flutter Entertainment became the world’s preeminent sports betting platform. We’ll discuss how the company utilized strategic acquisitions to expand its international presence, the techniques used to maintain high customer retention rates, its return to profitability, and the growth of its iGaming business.
This is an inside look at the playbook that helped build Flutter’s $50 billion business.
Flutter Entertainment’s origins date back to 1988, with the founding of Paddy Power through the merger of three Irish bookmakers: Stewart Kenny, David Power, and John Corcoran. The business later merged with Betfair in 2016 and eventually acquired the leading U.S. daily fantasy sports operator, FanDuel, after the repeal of PASPA in 2018.
Flutter now operates through two divisions: 1) FanDuel for its businesses in North America and 2) Flutter International for its businesses across the rest of the world. In total, Flutter hosts various games (sports betting, casino, poker, etc.) in 100+ countries, including the U.S., U.K., Ireland, Australia, parts of Europe and Africa, and Brazil.
Similar to other sportsbooks, Flutter generates most of its revenue from sports betting, daily fantasy sports (DFS), and online casino games (iGaming). However, Flutter also has a horse racing business (TVG/FanDuel Racing), a media business (FanDuel TV), and a B2B data group that builds proprietary gambling technology.
These diversified revenue streams (across continents) have had a massive impact on Flutter’s financial reports. The company generated $14.05 billion in revenue for 2024, a 19% increase from 2023. Furthermore, Flutter’s net income swung from losses in 2023 to profits in 2024, led by a 13% jump in average monthly players to 13.9 million.
As for North America specifically, Flutter’s U.S. business (FanDuel) brought in $5.798 billion in revenue last year. Most of that revenue was generated through FanDuel’s sportsbook ($4.0 billion), with a smaller amount coming from iGaming ($1.5 billion).
Now, it’s no secret that Flutter’s acquisition of FanDuel in 2018 was well-timed. By acquiring the country’s leading daily fantasy sports platform, Flutter was able to gain significant market share immediately after PASPA was repealed by marketing its new online sports betting product directly to existing clients. However, we are now seven years removed from the Supreme Court’s decision, and Flutter’s continued success has more to do with its flywheel of product innovation than its first-mover advantage.
FanDuel has leveraged its market-leading positions in other countries (the U.K., Australia, and Italy) to reduce customer acquisition costs in the United States. The formula is simple: when a new state goes live, you spend a bunch of money to acquire as many customers as possible, with the understanding that the payback period is less than 18 months. As more states go live and customers start betting larger amounts, your volume increases.
These customers then stick with FanDuel because of product innovation. FanDuel pioneered Same Game Parlays (SGP) in 2019 and has recently introduced “YourWay” betting, allowing customers to create their own lines and custom player props. These products not only attract more customers, but they also help improve gross margins.
FanDuel reported a gross revenue margin of 16.3% in June. That was the best ever month in terms of hold for the sportsbook — and it wasn’t a one-off. The company’s push toward higher-hold products helped it achieve an industry-leading structural gross revenue margin of 13.6% in Q2, up 70 basis points year-over-year. That makes FanDuel one of only two U.S. sportsbooks to consistently record margins above 10% (along with DraftKings), with every other sportsbook recording single digits. FanDuel is now quickly approaching its previously stated long-term goal of 16% hold by 2030.
However, product innovation also expands well beyond margins. By processing more than 4 billion bets annually, Flutter’s 1,500 pricing specialists can leverage proprietary data to improve pricing accuracy, further accelerating its hold rate. Flutter then uses these additional profits to allocate more resources to product innovation. In 2024 alone, Flutter spent $820 million on research and development. This creates a flywheel effect that leads to even more customer acquisition through personalized offers, and it’s a big reason why FanDuel is able to retain over 91% of its top 20% of customers.
Many people argue that prediction markets like Kalshi and Polymarket pose the biggest threat to FanDuel’s market-leading position. The theory is that prediction markets can steal betting volume from the traditional sportsbooks because they are regulated at the federal level by the CFTC, a key point of contention from state-regulated sportsbooks. But that’s also the exact reason why these prediction markets pose a minimal threat. Not only do they lack Flutter’s scale — Flutter spends more money on marketing than they generate in operating income — but sportsbooks like FanDuel can also offer boosts and odds to individual players to keep them engaged. If prediction markets tried something similar, they would run into regulatory headwinds.
Instead, the expectation is that developments on the prediction markets will leak their way into traditional betting markets. In fact, FanDuel has already entered the space through a deal with derivatives exchange CME Group, which will provide FanDuel’s more than 12 million customers with access to financial markets. These markets will initially focus on financial products (such as the price of crypto and oil), but the expectation is that FanDuel will eventually expand these markets into sports as well.
It’s also worth mentioning that sports betting is just one piece of the puzzle. Flutter’s wide range of products enables the company to transition users from sports betting to higher-margin products, such as online casino games. In Q2, Flutter generated $1.775 billion in iGaming revenue. That was a 31% jump from Q2 2024, and it means that iGaming — a higher-margin business — now represents 42% of Flutter’s total revenue.
The growth of Flutter’s iGaming division is particularly interesting when you consider that this is a fundamentally different business than sports betting. Rather than bad outcomes negatively affecting a sportsbook’s hold, iGaming revenue is considered a safer bet.
But perhaps the most encouraging sign for Flutter (and FanDuel) is that the U.S. sports betting market is nowhere near its maturation. Recent budget pressures have accelerated the legalization of sports betting on a state-by-state basis, but large markets, such as California, Texas, and Georgia, have yet to approve online sports betting. The continued crackdown on illegal sites has also pushed more bettors into the regulated market, and the U.S. market still has low penetration compared to more mature European markets, with many experts predicting that new betting formats (custom odds, microbetting) will continue to expand the total addressable audience.
So the bottom line is clear: Flutter is already the world’s largest and most profitable sportsbook. Now, the category leader may become even larger. The company’s unique flywheel — better pricing and live products leading to deeper engagement and higher margins — continues to compound. Layer in billions of dollars of diversified global earnings with a disciplined approach to promos and acquisitions, and you have a durable business built to convert audience growth into repeatable profits at scale.
And Flutter’s runway ahead is still long. Several large states are expected to legalize sports betting over the next five years. Meanwhile, live and micro-betting are expanding use cases, and iGaming is increasing each customer’s lifetime value. In that landscape, no one is better positioned than FanDuel to capture the upside. If you believe the U.S. sports betting market will continue to grow, Flutter appears to be the platform most likely to turn that momentum into compounding shareholder value.
For more information, please contact corporatemedia@flutter.com.
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