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Last week, Flutter Entertainment published its 2025 accounts, which markets and investors received as underwhelming. The New York and London listed gambling group remains unchallenged in its status as the highest valued iGame in business globally, yet it cannot obscure the growing liabilities and cost pressures impacting the scale and efficiency of its corporate performance. So is 2025 merely a blip in Flutter's uncompromising growth trajectory? or does it signal a new set of realities? Like its peers, Flutter is now susceptible to global headwinds such as regulatory burdens, tax uplifts and intensified competition, forcing the group to confront tougher questions about how it restores profitability and delivers improved economic performance. Welcome back to iGaming Daily, supported by Optimove, the creator of positionalist marketing and the number one sp- player engagement solution for sports betting and iGaming operators. Learn how OptiMove's positionless marketing is changing how iGaming teams operate. Discover how operators are using OptiMove's positionless marketing platform to launch personalized CRM campaigns, dynamically change casino lobbies and bet slips, and create engaging gamified experiences. can learn more at OptiMove.com. I'm Charlie Horner and today I'm joined by SBC's Editor-at-Large, Ted Menmure. and SBC News editor Ted Orme Clay. uh Ted M, happy Monday. How's things? Good, very well. It's returning back to a very much kind of changed world over the weekend, but we won't speak about that. It's just firmly focused on flat. Yeah, yeah. It's a fast moving situation. So by the time this comes out, we might be dealing with another whole new world. uh Ted, how are you? Yeah, yeah, pretty good. Like, know, uh good in myself. Yeah. Like everyone else, been pretty glued on current affairs at the moment. But yeah, as Ted said, topic for another day, I think, for a different podcast. em Yeah. And I actually had a decent weekend. was, had a trip over to our old stomping ground of Leeds, Charlie. Always good to visit the good people of Yorkshire. But yeah. And now back here to talk about Flutter. nice. And someone else who has a presence in Leeds, Flutter. Yeah, of course. Love the little segue there, Ted. You set me up perfectly. How about you kick things off then because they did publish the 2025 accounts. It's always a big day in the calendar for us as reporters on the industry. Ted OC, how about you just give us a rundown of the headline figures and tell us a little bit about what it means for Flutter's 2025 performance? Well, just from a revenue perspective, their revenue remains Pretty formidable. Obviously, they're retaining their position as one of the world's largest gambling public listed companies. It's still pretty unmatched there. The revenue for the full 12 months was at $16.4 billion. That's around 12 and a half billion British pounds for our UK audience, 17 % higher than the year before. uh Pretty substantial figure there. The cracks start... uh For want of a better word, I the cracks start to appear when you look at more profit and loss It's it's clearly been a good year for flutter in terms of getting that revenue in getting their brand their different brands set up across lots of high-profile markets high-growth markets and Really and you know get getting good getting good engagement with customers all over the world But it's also been a very costly year. It's been very investment heavy. There's been a lot of regulatory Changes and goings on across multiple markets. obviously we've got, although the taxes aren't yet in effect in some of these places like the UK and Brazil, we are starting to see a bit of the impact of the tax burden that will start hitting the industry even harder in 2026. if I can just, I've got the net income was down 351 % from a gain of 162 million to a loss of 407 million for the whole of 2025. We mentioned some of these regulator things and I will talk about the situation in India a bit more, but that had an impact. And like I say, in other areas, it was quite an investment heavy year. I know we'll talk about this as well. saw Fandual Predicts get launched, which is something they'll have to chuck a few dollars into developing and launching, I'd imagine, that's driven up some investment. Marketing spend as well throughout the year. m That whole process of setting up their brands across all these different markets and pushing that, pushing their presence, securing those foot holds, that will obviously come with pretty hefty marketing and advertising bills. So yeah, know, kind of a mixed picture in that sense. Very good on revenue, but we're really seeing the impacts of heavier costs, heavier investment, heavier taxation on the profit and loss side of things. Yeah. I think Flutter's a great example of just looking at a business to tell us a little bit about where the global industry's at. in terms of that and yeah, those heavy investments in getting players through the doors paid off, know, average month of players up, revenue up, you know, missed targets when it comes to earnings and profitability. Ted M, how do you reflect on those numbers and what has the market reaction been to some of those missed targets? 2025 hasn't been a good year for Flutter and I think you've got to kind of put it in that prospect and even just at the basic of looking at a share price value, it's halved in the year to date. And I think that that points to this underlining impairment in India felt by the closure of Jungle E which is 550. However, as Ted says, if you look under the bonnet and look into the cracks, you see where the liabilities are starting to show. Now, this is a company that across its units has spent one billion in integration costs and especially for the markets of Brazil, Italy and continued costs on Fandial in the USA. And its marketing budget is reaching four billion. What you're seeing from kind of the top line to bottom line is that Flutter and its units are not getting the same ROI they were getting two years ago. Still very much reliant on US growth. And certainly, but it certainly has kind of accountabilities coming in, not only in Asia in terms of the jungly closure, but Australia and a significant slowdown beginning to appear in the UK. It does have options and kind of narratives, especially kind of growth in Italy and Serbia, but is that enough to kind of bring the scale back towards Flutter and its former kind of growth profile? it has a lot of questions to ask in the coming years, especially in 2026. definitely. Definitely. We really do need to highlight what happened in India halfway through 2025 because the real money game ban in India was huge for Flutter. There's obviously a huge impairment that they need to of write down. Maybe Ted Osea, you could give us some of the numbers on that, but then also just tell us a little bit about What else is sort of structurally hitting Flutter's profitability? the operating profit was also slashed, even if you discount those kind of impairments. Yeah. firstly, we just want to talk about the India real money games ban. Obviously we reported on this, both SPC News and our colleagues over on iGamingExpert reported on this quite a lot last year. undertook the decision to do a federal ban on real money games. There's still a couple of state markets that are available, but nationwide, you can't operate what they call real money games there anymore. That obviously dealt a big blow to Flutter in that sense. They had to call it quits on the Junglee operation. I believe there was an impairment of $515 million in the second half of last year as a result of that closure. And it's been noticeable that I think over quite a past couple of years, across quarterly reports and full years earning reports at the Asia Pacific region has been quite a good one for Flutter. em The jungly operation has been pretty significant to that. Obviously, I think they would probably also include sports betting in Australia under that reporting region. em yeah, Australia is one side for a moment. The Junglee withdrawal as a result of the Indira R &G ban is the big impact there. That will have partly contributed to a sharp decline in operating profit from it was 870 million for the full year 2024 and it was 36 million last year. I'd imagine the impairment from Junglee will have had a pretty big impact on that one, along with obviously some other factors, but still. In terms of restructuring, think we'll probably see them trying to make some adjustments to make up for the drop in significance of the APAC region to that operation, to their wider operation, I'd imagine. But like Ted said, the balance here might be, how do you respond to that without just becoming even more reliant on North America as your main revenue generator, main profit driver, that's going to be a bit of a fine line to tread, think. are you wanting to jump in on that? What's your view? Yeah, if I could just return to your introduction. And one thing you said is the status of Flutter. And yes, Flutter is the most valuable, well, was the most valued gambling PLC. But, know, this is a company that's achieved year on year scales. And yes, there has been concerns about profitability going back kind of two years now. But it looked relentless in how it approached markets. think where it's turning now is that, as you said in your introduction, is this just a blip or is Flutter really kind of liable to kind of these compounding pressures? And in a sense, is it like, we starting to see kind of a PLC get bruised and really kind of show its scars? And I think that's part of know, what's really harming above anything else is the impact of share price and can try to kind of gain back that investor confidence. Yeah, that share price is something that really is worth digging into and maybe we'll talk about a little bit more in the back half when we touch on North America because I think that's certainly got something to do with it. But it's not just the rise of prediction markets, right? It's their exposure globally to so many different markets and uh I think that's something that investors are looking at very closely. But before we go to a break, let's just look at Europe, because obviously we report on the European side of things very closely. How did Flutter perform in the UK and Ireland? And did the company's leadership talk about regulatory pressures, tax rises, and they're still confident in building up market share as we predict that some of those tier three, tier four operators start to fall out of the market. What was the story that they told on UK and Ireland and maybe some of the European markets? So UK and Ireland, we've seen them acknowledge some difficulties there, chiefly around, as you mentioned, the forthcoming tax increases. Their overall revenue from the UK and Ireland was down 1 % for the full year and 9 % in Q4. But I think what we saw was that they had an improvement in iGaming revenue, but that was offset by a decline in sports betting revenue, which overall dragged the whole performance down. em I think maybe this could partly be a result of just the fact that the UK in particular, but also Ireland, are both very competitive markets. There's a lot of the same companies active in both. perhaps, you know, just to... speak bit hypothetically and maybe just focus on growth and securing opportunities in lots of other international markets, Italy, Brazil, the US and so on, has allowed some of their UK competitors to drive forward a bit more in some sense. They did complete a full migration of SkyBet onto Flutter's proprietary platform, I think, during the year, which they've obviously highlighted as an achievement. But in his letter to shareholders, Peter Jackson did highlight the challenge that the coming gambling tax increases from next month with the doubling of our effective doubling of remote gaming duty to 40%. They did highlight that as a challenge. They say that they've got cost mitigation measures in place. As you said, Charlie, we already know that. Actually, think, no, did you mention this? I'm sorry, forgetting what you did mention for a moment, We know that they're planning on reducing their marketing budget like a lot of other major firms are that Entain and Evoke are also looking at doing. Perhaps, like you said, they will be able to capitalize on this as smaller firms feel the effect of the tax rises more than they do. But that's just something we're going to have to look at further down the line. Based on their revenue already going down, maybe that's going to affect their confidence, being able to pull that off a bit. Outside the UK, though, I do think that performance was going quite well in Italy. They've got two big brands there now, Cissell and Snitec. I think they're pretty confident of how things are going in Italy. They've set themselves up in a good leadership position there. That's more of a light at the end of the tunnel. kind of market for them, I think in Europe as opposed to the UK and Ireland. Sure. Ted, before we go to a quick break, anything to add there? I'd just say that I think coming into kind of H1 2026, the first real test for Flutter and its kind of first kind of valuation will be UK cost control, what they appear like on paper and how the market reacts to them. And also cost controls in comparison to UK competitors, Evoque and Thane. It's one of the benchmarks of this year for the company. Performance in the home market. No, for sure. Something that we'll definitely keep a close eye on, but we'll take a short break and we'll come back and we'll touch on North America because it's increasingly one of Flutter's most important markets. Welcome back to iGaming Daily. Today we're touching on Flutter's 2025 financial performance. It's been a mixed set of results, I think it's fair to say. And certainly when it comes to the US as well, and we have to touch on the US because obviously FanDuel is a flagship brand of the Flutter group. And it's been an interesting 12 months, I think it's fair to say. Ted OC, how about you give us the overview? How did FanDuel fare during 2025 trading? Because I believe it's a varied story. depending on whether you look at this from a sports and a casino point of view. Yeah, like you say, it's split down the middle there between the sports and casino performance, kind of similar to actually what we just talked about in the UK where we saw casino revenue up and sports revenue down. I think in Fanjul's case, I would just double check what I've got in front of me, but I'm pretty sure revenue is up across both. So the brand... The brand saw an overall increase in revenue, I think, of about 35%. But yeah, because the casino side of things was definitely the bigger growth driver. The Fangio casino saw revenue up 33%. So yeah, that's a pretty solid improvement on the year before. I think the betting, the sports betting side of stuff saw, attributed, Pia Jackson attributed this to some... what you could less compelling content around the NFL. Obviously that being a pretty big bang market for everyone in the US, probably the biggest. And there were some questions from analysts on their call. The call was very US focused, I guess as you'd expect with them being, having primary listing on the New York Stock Exchange now and everything with Fanjul being the giant that it is. But there were some questions around US tax changes as well and how they might be planning for this. So that's another thing we're going to have to factor in as we go through 2026. And the other big, obviously, elephant in the room of the US is the prediction market side of stuff. there were some questions about that and the launch of Fanjul predicts. I think they are expecting to get a pretty big boost from that. But, you know, this is also a space that lots of other people are hoping to get involved in. And to them, you know, been, as Ted OC says, it's an interesting set of results there. Different numbers on different verticals. But I think, as you said before the break, think analysts are always looking at how Flutter compares to its peers. And in the US, that big pair is DraftKings. Firstly, how do you reflect on that US performance? And then secondly, how do you view FanDuel in comparison with that DraftKings brand that it's so fiercely competitive with? Look, I think we've to review 2025 and how it's played out for the big two in the US. I think market dynamics, especially at an investor level, have changed. And that's really down to prediction markets coming on board, really shaking everything up at a regulatory level, from state to federal. And also, people, or investors in particular, having something to speculate on. beyond what was given to them post-Paspa. I think that these are kind of the dynamics that are playing out and it's kind of impacted both of these, both DraftKings and FanDuel being on top of the US kind of pyramid. I think that the market is kind of widening out now to kind of interpret what's called prediction markets. are doing and what effect they're to have. It's something that's kind of dividing opinions across the... that divides opinion across the iGaming circles. I think it even kind of divides opinions at the board level in terms of what strategy to undertake. There's certainly been kind of a panic in the market with regards to FanDuel and DraftKings and how they kind of counter... growth of kind of calcium or not so much the growth but just the expected growth valuation of calcium and polymarkets coming into play. uh I think for the top two and especially given what Fandule and DraftKings have put into the US market to scale it up to regulate across each state to be in kind of the podium in each market, this is the last thing they predicted. This is the last battle that they want to take is having two very speculative companies in Caoshi and Polymarket coming on board as competitors. I think it's been a system shock for them. huge, huge system shock. I think eyebrows were certainly raised when Caoshi did an investment round fairly recently, which valued them higher than DraftKings, which was interesting to say the least. I will say to listeners before we just carry on in this conversation, we've got a really, really interesting and explosive interview with the president of IMGL, Mark Dunbar on the podcast coming up, where he talks a lot about prediction markets and the CFTC and what's happening in the US. We'll get more thoughts on the prediction markets side of things with Tom Nightingale and Justin Byers from the SBC Americas team later in the week. uh Ted OC, Futter's share price has taken a huge hit in last 12 months, as we've already outlined. And I think part of that is due to the rise of prediction markets. Do think this is rational in the sense that, yeah, they've got this new competition in the shape of calcium polymarket, but given the very questionable legal status of those platforms, do you think, you Flutter and DraftKings have been underestimated or rather the prediction markets have been overestimated? It's an interesting question. It's also a very tricky one. um I I've seen some discourse around on LinkedIn and in some other places saying that maybe Flutter was a bit too late to get involved in the prediction side of things or... have invested more in it with its creation of Fanjul Predicts, which I believe launched in December. Obviously, the company has a background as the operator of the Betfair Exchange, that being one of its biggest international brands. We can talk a lot about predictions and stuff, the prediction markets and betting exchanges have a lot of similarities, let's just put it that way. I think Flutter acknowledged that. em quite early on last year actually saying like, we do have some experience of running a bet for exchange. We could translate that into running in predictions. So I think there might be a sense of maybe they weren't quick enough off the bat to go and to actually get that done and get involved in the space, which like we said, Polymarket and Caoshi are the two sort of leaders in and now are almost competitors to the betting companies in that sense. Draft Kings on the other hand have been, I think they've been a lot more gung-ho with it of wanting to really get stuck into predictions. I don't find that too surprising given that they've shown a lot more willingness to get involved in some more niche and quirky kind of stuff, haven't they? They had that NFT marketplace for a while. But yeah, that kind of actually kind of relates to what you said there. The NFT craze came and went. The question remains, is that going to be the same with prediction markets? Is this craze just going to come and go? or like we've talked about on previous podcasts, would let's say a future change in administration in the US lead to a change in direction for the CFTC where they'd no longer be entirely as entirely favorable to prediction markets as they currently are, which would then deal those platforms a pretty heavy blow. yeah, that's the big question. That's the big thing to try and predict if you want to try and make a daft joke about it. Is our betting company is just the more stable, sustainable investment for people? they always be there? Will predictions just be a fad? That's the question I think a lot of investors and analysts are going to be asking themselves about this. I'm just going to pitch in and just say, look, I think that when we review 2025, and I think that if you're in the top ranks of Flutter leadership, I think you've learned a kind of very, very cruel lesson that, you know, the market share, yes, the performance has been underwhelming this year, but I think what's really kind of taking them or giving them this kind of hit in share price is the rise of prediction markets. And it's also knowing that, and we talk about kind of changing conditions, right? from a regulatory point of view, but from the investor sentiment now, and especially in the US, points to the favored horses or the ones that are being bagged at Couch & Polymarket. And they're not just being backed by an investor base, they're being backed by Wall Street itself. And then you look at kind of the partnerships that these guys are forming with CNN, the Wall Street Journal, New York Times, Substack. And these are the companies carrying momentum. Uh, they don't have to publish their profitability. don't have to probably see their earnings because of not PLCs. They can just sit in this lane of we are backed heavily by venture capital. Even the US president. Now that is, yeah, no, but that is something to contend with. And that is something that's never happened in the history of business. And you can kind of see that why you, you, you're seeing such a sharp decline. I wouldn't know what to Flutter's leadership in who their new enemies are. All very, very compelling points. think all of those points of value. I'm just slightly confused as to how prediction markets have become this bigger threat that it's helped to contribute towards Flutter's share price declining by 65 % in six months. That is stark. But we are running over time here, gentlemen. So let's bring this towards a close. And finally, really, I just want to ask you both, where are Flutter's strategic priorities for 2026? And can it deal with the weight of expectation? Can it have that weight on its shoulders as being Global Eye Gaming's biggest listed operator? Viewing this at this stage, I think that Flutter knows. from an operational level, what its priorities are. And that is improve the profitability margins and metrics. And the market should respond to that. However, the iGaming market and its valuations have been flipped by prediction markets. And does that performance even equate to them getting back their listings? against such kind of spectacle threads such as calcium prediction markets. I don't think so. I think we're in a very, very kind of crazy stage of, of iGaming and, and investor circles. And I don't think it's going to reset in 2026. Yeah, I'd agree. I think this is probably something that's going to be a much more longer term play. think, yeah, obviously, obviously, yeah, to state the obvious. Their main priority will be sorting out the margins in 2026. That leaves them a lot of things to consider. They're going to be looking at how to mitigate the impact of all these taxes across various markets in UK and Brazil being the ones that first come to my mind. I think the other thing will be as, oh yeah, how do they respond to the growing competition from predictions? Maybe we'll see a more concerted effort to really push this Fanjul predicts platform out there to make that a bit more of a a real serious competitor to calcium and polymarket. And yeah, and then just across the board, just more wider focuses on cost cutting and efficiency, making sure that you get every, really improved that ROI that Ted mentioned earlier. There's been a bit of a thorn in the side for them. Plenty for Flutter leadership to be thinking about and plenty for us to be reporting on throughout this year. Let's take a deep breath and we managed to get through it. So Ted, Ted. Thanks very much for joining me today. I really appreciate your help on this one. And to our audience, thanks ever so much for tuning in to today's episode of iGaming Daily and come back tomorrow to keep up to date with all the latest global gambling news.