Community Trust ScoreVerified
Flutter Entertainment found a way in. Not as a platform. As the house.
The company behind FanDuel doesn’t want to compete with Kalshi or Polymarket for retail prediction market users. It wants to quote prices on their contracts instead, earning the spread between what buyers pay and sellers receive. CEO Peter Jackson laid it out during the company’s latest earnings call—market-making in prediction markets already turned a profit during Flutter’s trial run, and the firm plans to do more of it. “Market-making will be a good contributor to our revenues,” Jackson said, confirming the business worked after an initial test phase. Flutter already provides liquidity on at least one platform. More deals are coming.
Why Flutter Picked Market-Making Over Platform Operations
The choice makes sense for a company that built its fortune on odds. Flutter’s algorithms already price thousands of sports bets daily, managing risk across markets where outcomes shift fast. Extending that infrastructure into prediction markets—where users bet on elections, economic data, or other events—didn’t require new technology. It required applying the same risk-pricing tools to different contracts. Flutter quotes buy and sell prices on event outcomes, captures the spread, and manages inventory risk just like it does for football matches or horse races. The company earns money whether the contract settles yes or no, as long as it balanced the book.
FanDuel Predicts launched in late 2024. Five states got access first. The app, built with CME Group, offers contracts on financial data releases and event-based markets. That partnership matters because CME operates under federal commodity law, not state gambling regulations. Event contracts get classified as derivatives, giving Flutter a path into states where sports betting remains restricted or banned outright. The regulatory flexibility is the point. Flutter can offer prediction market exposure in places where a traditional sportsbook can’t operate.
Diversification After a Rough Quarter
Jackson’s comments came as Flutter cut its full-year guidance. Unfavorable sports results hurt the bottom line—bettors won, the house lost. Prediction market revenues offer a hedge against that volatility, though market-making brings its own risks. Pricing errors can pile up fast. Inventory imbalances—holding too many contracts on one side of an outcome—can turn a profitable quarter into a losing one. But Flutter thinks it can handle that. The company’s been managing similar risks in sports betting for years, and the infrastructure already exists.
Most prediction market platforms chase retail users. Kalshi wants traders making small bets on Fed decisions. Polymarket built a crypto-native exchange for political and cultural events. Flutter’s not interested in that fight. It wants to be the liquidity provider those platforms rely on, the firm quoting prices when users want to enter or exit positions. That role requires different skills—risk management, regulatory relationships, and pricing speed—but it sidesteps the costs of customer acquisition and platform operations.
FanDuel Predicts combines financial contracts with sports-adjacent markets, creating a hybrid offering. Users can bet on jobless claims one minute and the Oscars the next. The mix gives Flutter flexibility to test what resonates with users while keeping the app distinct from FanDuel’s core sportsbook. The app’s structure also lets Flutter experiment with contract types that traditional sportsbooks can’t easily offer, like yes-or-no propositions on economic indicators or geopolitical events.
Flutter’s focus on liquidity provision instead of exchange operations is pretty much a bet on its existing strengths. The company doesn’t need to build a retail platform from scratch or compete for users in a crowded market. It can plug into existing platforms, quote prices, and collect the spread. The strategy worked during the trial phase, and Jackson made it clear Flutter sees room to grow. The firm didn’t specify which platforms it’s already working with or where the next deals will land, but the expansion is happening.
The prediction market space is getting crowded, but Flutter’s angle is different. It’s not trying to be Kalshi or Polymarket. It’s trying to be the firm those platforms call when they need someone to quote a price on a contract with thin liquidity or uncertain outcomes. That role requires capital, risk management, and speed—all things Flutter already has. The company’s sports betting infrastructure translated smoothly into prediction markets, and the early results suggest the business model works.
Flutter’s move into market-making came at a time when U.S. prediction markets are expanding fast. Kalshi won a court fight with the CFTC in 2024, opening the door for event contracts on elections and other topics. Polymarket, despite regulatory uncertainty, saw billions in volume during the 2024 election cycle. The space is growing, and Flutter wants a piece without the headaches of running an exchange. Market-making lets the company earn revenue from the activity without taking on the compliance burdens or customer support costs that come with operating a platform.
The risks are real. Pricing prediction markets is harder than pricing sports bets in some ways—outcomes can hinge on obscure data releases or unpredictable events, and liquidity can dry up fast. But Flutter thinks its experience in sports betting risk management gives it an edge. The company’s been balancing books and managing inventory for years, and the same principles apply. Quote a fair spread, manage exposure, and adjust prices as new information comes in. Flutter’s betting it can do that better than most.
FanDuel Predicts is still small, but it’s a signal of where Flutter wants to go. The app gives the company a testbed for new contract types and a way to build relationships with users interested in prediction markets. But the real revenue opportunity is on the back end, where Flutter provides liquidity to platforms that need it. Jackson’s comments made that clear. Market-making already worked during the trial phase, and Flutter’s expanding the operation. The firm didn’t share revenue figures or name its platform partners, but the strategy is set. Flutter’s playing the house, not the exchange.
Frequently Asked Questions
How does Flutter profit from prediction markets without running a platform?
Flutter acts as a market maker, quoting buy and sell prices on event contracts and earning the spread between them. The company uses its sports betting risk-pricing infrastructure to manage inventory and pricing risks across prediction market platforms.
What is FanDuel Predicts and how does it fit Flutter’s strategy?
FanDuel Predicts is a mobile app launched with CME Group in late 2024, offering contracts on financial data and event-based markets in five states. It serves as a testbed for Flutter’s prediction market offerings while providing regulatory flexibility through federal derivatives classification.
