New Flutter CEO bets on FanDuel promotions to win customers as profits suffer

Flutter's new CEO Dan Taylor is counting on better products and more generous customer rewards to help convert FanDuel's improving engagement into stronger profits.

Taylor's been at the helm for just five weeks and issued his first earnings report as CEO on Wednesday, with third-quarter revenue and adjusted earnings before interest, taxes, depreciation and amortization missing Wall Street's expectations.

"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 also launched a nationwide rewards program in September that Taylor said has "resonated really, really well."

The early customer numbers are improving. Average monthly players on FanDuel's U.S. sportsbook rose 9% in the third quarter, while bet counts increased 15%, Taylor said.

Flutter's earnings release showed total U.S. average monthly players up 12%, including 24% growth in iGaming. Sportsbook handle, or the total amount wagered, rose 13%, but sportsbook revenue grew just 4% as promotional spending increased.

Taylor said the company plans to keep investing in customer experience. He said Flutter sees room to improve its structural margins over time by changing the mix of products customers use.

Flutter has increased its media spend to build FanDuel Predicts, its predictions platform to rival Kalshi and Polymarket, but the cost of sales as a percent of revenue is forecast to be 58% for the full-year 2026 and into 2027.

Taylor said there's fierce industry competition for customers but even still, FanDuel trading volume has skyrocketed 271% since July.

The FanDuel Predicts app added 140,000 new customers in October, Taylor said.

Taylor also defended the long-term opportunity in the U.S., pointing out about half the country still does not have access to regulated sports betting and 90% lacks regulated online gaming.

He argued that expanding legal markets is not a partisan issue because regulated betting offers consumer protections and gives tax revenue to states.

For the third quarter, Flutter reported an adjusted loss of 18 cents per share, compared with analysts' expectations for a loss of 28 cents, according to LSEG. Revenue rose 2% to $3.87 billion, below the roughly $4 billion LSEG consensus, while adjusted fell roughly 25% year over year to $360 million, also below expectations.