Sports betting outcomes are working out in favor of DraftKings and Flutter’s FanDuel

Analysts have their eyes on DraftKings (NASDAQ:DKNG) and Flutter Entertainment (NYSE:FLUT) after a mixed first half of the year for sports betting outcomes, including sportsbooks having a strong Super Bowl hold rate but a lower-than-anticipated hold rate on the NCAA basketball tournament.

The House may have recaptured its edge, with hold rates for May and June expected to be solidly higher based on the outcomes of sports events during the month and where the betting public was heavily invested. Contrary to popular belief, brick-and-mortar and online sportsbooks frequently have unbalanced positions and earnings exposure on major sporting events.

Needham Bernie McTernan warned that while the strong House edge may only be transitory, it will be a welcome sigh of relief for bulls due to the multi-quarter streak of negative sports outcomes. “We expect all eyes to be focused on sport outcome as the start of the NFL season is only 44 days away,” he noted. The firm boosted Q2 estimates and reiterated its Buy ratings on DraftKings (NASDAQ:DKNG) and Flutter Entertainment.

Meanwhile, Oppenheimer Jed Kelly said sentiment on Flutter Entertainment (NYSE:FLUT) skews positive into the second quarter earnings report amid record June U.S. hold rates, accelerating iGaming trends, and FX benefiting the business outside the U.S. Kelly and his team also believe Flutter Entertainment (NYSE:FLUT) and DraftKings (NASDAQ:DKNG) are preparing to become more proactive around prediction markets, where both could both offer a product in non-legal states.

So far in 2025 through the end of May, sports betting revenue of $5.53 billion was generated on a handle of $57.6 billion and a hold rate of 9.6%. The recent run of strong results for sports betting operators raises the prospect that the hold rate could be +10% for the full year if the NFL season goes according to form.