Citigroup has downgraded Flutter Entertainment to a ‘sell’ rating from ‘buy’, citing weakening customer engagement at its FanDuel sportsbook and ongoing uncertainty around U.S. Prediction markets. The move reflects growing concerns about the company’s near-term growth prospects in its core American business.
According to Citi analyst Monique Pollard, the downgrade stems from declining confidence in FanDuel’s U.S. Market growth trajectory for 2026 and 2027. Pollard told clients in a memo dated April 16 that the firm no longer evaluates FanDuel’s U.S. Business value based on 2028 financial year projections. Instead, under an updated valuation methodology, minimal value is being assigned to FanDuel Predicts, the company’s prediction market platform launched late last year.
“This reflects regulatory uncertainty,” Pollard stated in the client communication reviewed by multiple financial news outlets. The analyst emphasized that although FanDuel Predicts aims to capitalize on growing interest in event contracts tied to sports and political outcomes, Citi remains unconvinced the business will secure necessary regulatory approvals to operate meaningfully in the U.S. Market.
Flutter Entertainment’s shares have declined approximately 48% year-to-date, according to the same Citi research note. The drop follows the company’s late February warning that growth in its U.S. Business would moderate in upcoming quarters, a forecast that has since been borne out by weakening performance indicators.
Peter Jackson, Flutter Entertainment’s chief executive officer, had previously signaled challenges to investors, noting declining fan engagement tied to reduced excitement around the NFL season. Jackson told shareholders that lower NFL-related buzz was combining with other factors to soften customer activity on FanDuel’s platform, though he did not quantify the impact at that time.
The prediction market initiative, branded as FanDuel Predicts, represents Flutter’s attempt to diversify beyond traditional sports betting into newer financial products where users wager on real-world event outcomes. While similar platforms have gained traction in limited jurisdictions, U.S. Regulatory treatment of such products remains unsettled, creating a significant overhang on Flutter’s valuation.
Citi’s decision to cut the rating by two notches underscores the depth of its concerns. The firm had maintained a ‘buy’ stance on Flutter Entertainment prior to this revision, making the shift to ‘sell’ a notable change in institutional sentiment toward the sports betting and gaming operator.
Industry analysts note that FanDuel faces increasing competition in the mature U.S. Sports betting market, where customer acquisition costs have risen and promotional spending pressures margins. Simultaneously, the company must navigate varying state-level approaches to emerging products like prediction markets, which some regulators view as falling under existing gambling statutes while others consider them novel financial instruments.
For now, Flutter Entertainment’s U.S. Strategy hinges on stabilizing its core sportsbook business while awaiting clearer regulatory guidance on prediction markets. Until those uncertainties resolve, Citi suggests further downside risk remains for the stock, which has underperformed broader market indices throughout 2026.
Investors will watch closely for Flutter’s next quarterly earnings report, expected in early May, for any signs of stabilization in FanDuel metrics or updates on the prediction market rollout. The outcome could determine whether Citi’s bearish outlook proves prescient or overly cautious in the face of potential business model adaptation.
As the sports betting landscape continues to evolve, Flutter Entertainment’s ability to balance innovation with regulatory compliance will likely remain a key determinant of its long-term valuation. For now, Wall Street appears to be betting against near-term recovery in the company’s U.S. Fortunes.
Stay tuned to Archysport for ongoing coverage of developments in the sports betting and gaming industry, including regulatory shifts, market trends, and corporate strategies shaping the future of fan engagement.
