MW FanDuel owner Flutter takes $370 million hit from NFL bettors. Blame these winning teams.

By Weston Blasi

Flutter said this football season has seen the most 'customer-friendly' NFL outcomes since the launch of online sports betting

Turns out, the house doesn't always win.

Flutter Entertainment $(FLUT)$, the owner of the FanDuel sportsbook, had to revise its 2024 U.S. revenue estimate to be about $370 million lower after football fans won too much money betting on National Football League teams like the Detroit Lions and the Denver Broncos.

Flutter took its biggest loss of its fiscal fourth quarter during December's Lions versus San Francisco 49ers game, which ended in a 40-34 win for the favored Lions and cost the company $74 million.

"Following our [third-quarter] earnings report on November 12, continued strong U.S. player momentum has been offset by a period of very unfavorable U.S. sports results across the remainder of November and in December, primarily on NFL Parlay and Same Game Parlay outcomes," the company announced this week. "The 2024/2025 NFL season to date has been the most customer friendly since the launch of online sports betting, with the highest rate of favorites winning in nearly 20 years."

And it's not just Flutter seeing its profits hit by the recent hot streak for NFL bettors - rival DraftKings $(DKNG)$ has been getting crushed, too.

"NFL outcomes early in the fourth quarter ... have resulted in headwinds to revenue and adjusted EBITDA of $250 million and $175 million, respectively," DraftKings Chief Executive Jason Robins said in November.

He added that in the fourth quarter, DraftKings had experienced "the most customer-friendly stretch of NFL sport outcomes we have ever seen."

'The 2024/2025 NFL season to date has been the most customer friendly since the launch of online sports betting, with the highest rate of favorites winning in nearly 20 years.'

So what exactly does a customer-friendly outcome mean? Basically, that casual bettors won too much and more than expected.

Sportsbooks rely on extensive datasets, statistical models, public opinion and expert analysis to generate real-time odds for sporting events.

Casual bettors often assume that sportsbooks aim to balance betting action on both teams in a game to secure a profit through their "commission." However, the process is more complex; for instance, when a popular team faces a less popular one, achieving an even distribution of bets on both sides can be challenging.

So to mitigate risk, sportsbooks adjust odds as bets accumulate on the favored team by making wagers on the other side more appealing. This helps limit their exposure. And in scenarios where betting totals are significantly unbalanced, sportsbooks may find themselves rooting for one side to win.

Thanks to their commission, known as the "vig," sportsbooks can sometimes profit even when the results don't favor them. This makes it rare for sportsbooks to sustain long-term losses. However, during certain weeks of this NFL season - particularly weeks 5 and 6 - regular wins by favored teams like the Kansas City Chiefs and Minnesota Vikings led to substantial payouts for casual sports bettors. So even the sportsbooks' vig couldn't offset those losses.

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That exact scenario unfolded during last year's Super Bowl in February. Many sportsbooks were rooting for the 49ers, because the majority of bets heavily favored the Chiefs. So when the Chiefs ultimately won, sportsbooks like BetMGM $(MGM)$ reportedly lost millions of dollars.

These customer-friendly NFL outcomes can be traced to the same idea: betting favorites performing better than the sportsbooks anticipated, and therefore disproportionately winning money for public bettors.

NFL favorites were 144-121-7 against the spread in the 2024-25 season, according to data from Covers - one of the best seasons for favorites since sports betting was legalized.

So which teams cost Flutter the most money? The Lions have been sacking sportsbooks all season. They covered the game spread 12 times as the betting favorite, and ended the season with a 15-2 record, tied for the best in the league.

The Los Angeles Chargers (with a 12-4-1 against-the-spread record as a favorite) and the Denver Broncos (with a 12-5 against-the-spread record as a favorite) were also among the most wagered-on favorites this regular season.

Flutter said these recent outcomes have "no impact on the underlying assumptions and guidance expectations" for the future of its stock.

The NFL is by far the most popular sport for Americans to wager on, with tens of billions of dollars bet on football games each season. A projected $35 billion was wagered on the NFL this season, according to estimates from the American Gaming Association.

Since the U.S. ban on sports betting was lifted by the Supreme Court in 2018, it's been up to individual states to legislate sports betting. Thirty-eight states now offer some form of legalized sports betting.

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-Weston Blasi

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January 09, 2025 13:03 ET (18:03 GMT)

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