FanDuel iGaming Surge Counters Soft Sportsbook in Q3 Results
FanDuel, the U.S. segment of Flutter Entertainment, recorded total revenue of $1.368 billion in the third quarter (Q3) of 2025. This 9% increase year-over-year (YoY) was driven by strong growth in online casino operations, which offset a drop in sports betting revenue. While overall revenue climbed, the segment’s Adjusted EBITDA decreased 12% to $51 million, primarily due to rising state gaming taxes.
iGaming Drives Revenue Growth
The performance of FanDuel’s iGaming division was the key growth engine for the U.S. segment during the quarter ending September 30, 2025.
iGaming revenue jumped by 44% to $530 million. The increase was supported by a 30% rise in active monthly players (AMPs) for the iGaming vertical.
Sportsbook Margin Contracts
In contrast, Sportsbook revenue fell 5% to $783 million. The drop was caused by two main factors affecting the net revenue margin:
- Adverse Sporting Outcomes. The Sportsbook net revenue margin decreased 80 basis points (bps) to 7.4% from 8.2% in Q3 2024. This reflected unfavorable results for the house, particularly in the early part of the NFL season.
- Competition. High levels of promotion and bonus generosity from competitors also impacted the margin at the start of the NFL season.
Despite the revenue dip, the Sportsbook segment recorded a 5% acceleration in its active monthly players. Overall, total active players for the U.S. segment rose 8% YoY to 3.5 million.
Total stakes or handle increased 6% to $10.653 billion. FanDuel also introduced innovative product features, such as the market-first season-long Same Game Parlays (SGPs), which helped boost parlay penetration by 300 bps.
Higher Taxes Impact Profitability
FanDuel’s Adjusted EBITDA dropped from $58 million in Q3 2024 to $51 million in Q3 2025. This was due to a 90 bps contraction in the Adjusted EBITDA margin. The decline was largely driven by an increase of 120 bps in the cost of sales.
This cost increase primarily resulted from higher state gaming taxes in key jurisdictions, including Illinois (IL), Louisiana (LA), New Jersey (NJ), and Maryland (MD).
Furthermore, FanDuel adjusted to new regulatory changes, such as implementing a $0.50 transaction fee per wager in Illinois starting September 2025 following a new state-imposed fee.
Flutter Finalizes Full Ownership and Strategic Expansion
During Q3 2025, parent company Flutter Entertainment completed the acquisition of the remaining 5% non-controlling interest in FanDuel from Boyd Gaming Corporation for $1.553 billion.
The deal also resolved market access and retail agreements, resulting in a $205 million payment that contributed to the quarter’s net loss. With this transaction, Flutter gained full corporate control over FanDuel.
Strategic expansion remains a priority. FanDuel announced plans to launch a new prediction markets application, FanDuel Predicts, in December 2025. This application, developed in partnership with CME Group, aims to offer sports markets in states without regulated online sports betting.
This move seeks to accelerate customer acquisition into the FanDuel ecosystem ahead of future state regulation. The investment in FanDuel Predicts is expected to be meaningful, with an anticipated Adjusted EBITDA impact of $40 million to $50 million in Q4 2025 and $200 million to $300 million in 2026.
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