Prediction markets upend sports betting as Flutter CEO departs amid strategic turmoil
Flutter's CEO exit and slashed guidance highlight how prediction markets are reshaping the iGaming landscape, with implications for Malta's sector.
Prediction markets are turning the sports betting industry inside out, and Flutter Entertainment is the latest casualty. The world's largest online gambling company has seen its market cap collapse from $53 billion to $16 billion in less than a year, as the rise of event contracts eats into its core business.
Flutter CEO Peter Jackson will step down in late September after nine years at the helm, the departure following former FanDuel CEO Amy Howe's exit, leaving the company without two of its top executives from a year ago.
Jackson's successor, Dan Taylor, takes over on 1 October. He inherits a company that has fallen far behind in the prediction market race. "I look forward to leading the business as we continue to innovate, grow and build on the strengths that make Flutter unique," Taylor said in a statement.
Flutter's FanDuel Predicts product is off the pace. In June, Kalshi handled 83% of prediction market volume, while FanDuel Predicts barely registered. The US prediction market saw an estimated $50 billion in trading volume from the World Cup alone.
The company reported just $6 million in prediction market revenue in the second quarter, with a full-year forecast of $50 million. But expenses in the category are expected to exceed $200 million. That disconnect forced Flutter to slash its full-year US adjusted EBITDA guidance by 22%.
Flutter's stock dropped nearly 13% on the news, hitting a five-year low of $89.71 before recovering to $94.46. Investor Michael Burry, of "The Big Short" fame, more than doubled his stake at $90 per share, calling it a "fat pitch."
"We know why this is happening, and why the stocks are falling. Prediction markets have taken the gambling world by storm," Burry wrote on his Substack blog.
In a curious move, FanDuel Predicts will move all sports and novelty contracts from CME Group to Crypto.com. CME still owns 51% of the venture. Flutter remains wary of launching its own market-making exchange, with Jackson advising restraint on the complexities involved.
Analysts are not optimistic about a quick turnaround. Susquehanna's Joe Stauff lowered his price target from $121 to $115, citing skepticism on customer retention, anxiety over hyper-competition this football season, and indications that FanDuel is 9-12 months behind DraftKings in prediction markets. He noted "tangible progress on FanDuel's fix, the immediate replacement of Flutter's CEO and a steady international portfolio" as reasons for a positive rating.
Macquarie's Chad Beynon cut his target from $190 to $160. Still, he praised Flutter's diversified portfolio and M&A strategy as a "top way to capture global secular trends."
Outside the US, Flutter's international revenues grew 10% year-over-year, driven by a strong quarter in Italy. Jackson noted that in markets where Flutter's Betfair Exchange competes with other sportsbooks, the exchange has a "pretty small market share."
DraftKings, meanwhile, is capitalising on the prediction market wave. It maintained its full-year revenue guidance of $6.5-6.9 billion and reported $1.99 billion in Q2 sports revenue, up 5.7%. Over 600,000 customers have used its predictions product since the start of 2026.
"Predictions is already growing faster than we anticipated," DraftKings CEO Jason Robins said. "Our playbook to innovate on a leading Predictions offering all underpin our confidence that we can win the category this NFL season and beyond."
For Malta's iGaming industry, the Flutter saga is a warning. Prediction markets are not a side bet; they are reshaping how sportsbooks compete. Operators who ignore the shift risk being left behind, as Flutter's 65% stock plunge demonstrates. The next few months will show whether Dan Taylor can reverse course, or if the company's lead in traditional sports betting has already been lost.