Flutter Entertainment's new chief executive, Dan Taylor, is betting that better products and more generous customer rewards will transform FanDuel's improving engagement into stronger profits, even as the gambling giant reported third quarter results that missed Wall Street expectations.
Taylor, who has led the company for just five weeks, delivered his first earnings report as CEO on Wednesday, with revenue and adjusted earnings both falling short of analyst forecasts. Flutter's stock has dropped more than 60% year to date, yet Taylor insisted the company is now headed in the right direction.
"We made some changes to the product," Taylor told CNBC in an interview. "Fundamentally, the way you win this business is by delighting customers, delivering the very best experiences and delivering to them in the way that they want, with the right overall proposition."
FanDuel rolled out a nationwide rewards program in September that Taylor said has "resonated really, really well." The early customer figures are moving in a favorable direction: average monthly players on FanDuel's U.S. sportsbook rose 9% in the third quarter, while bet counts climbed 15%, according to Taylor.
Flutter's earnings release showed total U.S. average monthly players up 12%, including 24% growth in iGaming. Sportsbook handle, meaning the total amount wagered, increased 13%, but sportsbook revenue grew just 4% as promotional spending rose.
Taylor said the company intends to keep investing in customer experience and sees room to lift its structural margins over time by shifting the mix of products customers use. Flutter has also increased media spending to build FanDuel Predicts, its predictions platform designed to compete with Kalshi and Polymarket. Cost of sales as a percentage of revenue is forecast to reach 58% for full-year 2026 and into 2027.
Despite what Taylor described as fierce industry competition for customers, he said FanDuel trading volume has surged 271% since July. The FanDuel Predicts app alone added 140,000 new customers in October.
Taylor also defended the long-term opportunity in the United States, pointing out that about half the country still lacks access to regulated sports betting and 90% lacks regulated online gaming. He argued that expanding legal markets is not a partisan issue, since regulated betting offers consumer protections and generates tax revenue for states.
For the third quarter, Flutter reported an adjusted loss of 18 cents per share, narrower than the 28 cent loss analysts had expected, according to LSEG. Revenue rose 2% to $3.87 billion, below the roughly $4 billion LSEG consensus, while adjusted EBITDA fell about 25% year over year to $360 million, also missing expectations. The company posted a net loss of $1.15 billion, including an $873 million non-cash impairment tied primarily to Brazil, which banned sports betting and online gaming in September. Taylor said Flutter was disappointed by Brazil's provisional measure but took the impairment to "set ourselves up to win long-term."
The complications in Brazil, along with unfavorable sports results in the U.S. and internationally, led Flutter to cut its full-year revenue midpoint by $300 million to $17.61 billion and lower its 2026 adjusted EBITDA outlook by $160 million to nearly $2.5 billion. Capital returns are on hold in the meantime: Taylor said Flutter needs to bring leverage back into its target range of 2 to 2.5 times over roughly the next 24 months before it can consider buybacks again. For now, he said, the priority is organic growth and paying down debt.
