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Sports betting margins turned quietly favorable late in the NFL season, and that shift may show up clearly when earnings hit. Two of the biggest names in U.S. online betting now appear positioned to outperform expectations as analysts reassess how the quarter actually played out.
Late season NFL results often decide quarterly outcomes for sportsbooks. Toward the end of the year, betting dynamics moved in a direction that consensus forecasts failed to fully reflect.
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DraftKings and Flutter Entertainment look set to exceed fourth quarter earnings expectations following stronger betting margins on NFL games late in the quarter, according to analysis from Macquarie.
Analyst Chad Beynon said sportsbook hold rates rebounded sharply in November and December, reversing earlier season pressure and creating upside not fully captured in current market estimates. Hold represents the percentage of wagers retained as revenue, making it one of the most important profitability drivers for sportsbook operators.
Based on company guidance, implied fourth quarter hold stood near 11 percent for Flutter and 8.5 percent for DraftKings. Actual performance during the final two months of the quarter tracked materially higher.
“During the last two months of 4Q, FLUT/DKNG achieved hold rates of 14%/10%, resulting in 4Q hold of 12%/9%,” the analyst said.
That late season strength lifts full quarter estimates meaningfully above consensus.
Macquarie estimates the margin improvement could add between $100 million and $200 million in fourth quarter EBITDA for Flutter. DraftKings could see an incremental $50 million to $100 million.
Under those assumptions, Flutter fourth quarter EBITDA could reach roughly $450 million, far above the $343 million consensus estimate. DraftKings EBITDA could land near $273 million, compared with consensus expectations closer to $237 million.
NFL outcomes earlier in the season had moved heavily in favor of bettors, forcing operators to lower guidance and dragging down valuations. The late rebound underscores how sensitive earnings remain to football betting performance.
DraftKings shares fell roughly 40 percent from August highs to fourth quarter lows, Macquarie noted, even as NFL hold recovered late in the season and online betting stocks posted only modest rebounds.
Beynon also pushed back against growing concerns around prediction markets as a competitive risk to regulated sportsbooks.
According to Macquarie estimates, prediction platforms account for roughly 5 percent of legal sportsbook handle. Most of that activity comes from non legal betting states, meaning the volume skews incremental rather than cannibalistic.
“Our view is unchanged from Day 1 — Predictions’ sports product is not competitive with online sports betting, and most volume is from non-legal sports betting states, creating incremental EBITDA opportunities for DKNG/FLUT,” he said.
The analysis suggests traditional sportsbook operators continue to hold structural advantages in scale, liquidity, and product depth.
DraftKings is scheduled to report fourth quarter results on Feb. 12. Flutter is expected to report on Feb. 26.
Macquarie said online casino and sportsbook stocks remain favored heading into earnings season. The firm also highlighted Genius Sports and Sportradar as data and technology providers that appear unfairly pressured by recent weakness, with upside tied to continued growth in live betting activity.