Flutter's FanDuel Grows US Online Casino Revenue 14% in Q2

Flutter Entertainment's US iGaming business generated $577 million in revenue during the second quarter of 2026, up 14% year-over-year, even as new state tax increases in New Jersey, Illinois and Louisiana ate into profitability, the company reported August 5.

The London-listed parent of FanDuel said direct casino average monthly players (AMPs) climbed 26% in the quarter, the primary driver behind the segment's overall AMP growth of 14%. 

iGaming now accounts for 34% of Flutter's total US revenue of $1,683 million, underscoring how central online casino has become to the company's American business even as its sportsbook arm struggled.

Sportsbook Slumps While Casino Climbs

The iGaming growth stood in sharp contrast to Flutter's US sportsbook performance, which posted revenue of $1,039 million in the quarter, down 14.8% from $1,219 million a year earlier. For the first half of 2026, sportsbook revenue fell 7.2% to $2,183 million from $2,353 million in the same period of 2025, while iGaming revenue rose 16.5% to $1,141 million from $979 million.

FanDuel said it retained its position as the number one operator in US iGaming, with a 27% share of gross gaming revenue. Combined with PokerStars US, which Flutter reports within its International segment, the group's total US online casino share reaches 28%.

Chief Financial Officer Rob Coldrake said Flutter has reiterated its guidance for full-year iGaming revenue growth in the high teens percentage range, adding that exclusive content, including new installments of past hits such as Huff N' Puff and Willy Wonka-branded slot titles, is scheduled to launch monthly through year-end.

New Jersey, Illinois and Louisiana Tax Hikes Erode Margins

Flutter said cost of sales rose 510 basis points as a percentage of revenue during the quarter, a jump the company attributed to state gaming tax increases and heavier promotional spending, or "generosity" investment, aimed at retaining players. Those pressures were only partially offset by market access savings and renegotiated commercial agreements.

The tax pressure is not new. On Flutter's Q1 2026 earnings call, Coldrake had already flagged the issue when explaining a roughly 200 basis point year-over-year decline in US gross margin.

"Tax increases year on year from a state perspective — New Jersey, Illinois, and Louisiana — which total approximately 220 basis points. That is the main moving part," Coldrake said.

On the Q2 call, Truist Securities analyst Barry Jonas pressed Flutter on North Carolina's decision to raise its online sports betting tax to 22% while adding a new 6% levy on prediction markets. CEO Jeremy Jackson said the shifting state tax landscape is now a factor in how Flutter balances its sportsbook and prediction-market products.

"From a state-by-state tax perspective, there's also a lot going on at the moment. I think we've been pleased with our focus on trying to get new states to open. I think that's an important component that we need to recognize as well," Jackson said, adding that broader regulatory questions around prediction markets are likely to be resolved by the US Supreme Court.

Direct-to-Casino Content Push Behind AMP Growth

Executives credited exclusive content and celebrity marketing tie-ins for much of the quarter's 26% growth in direct casino players. Jackson pointed to the June launch of "Love Island: Unlocked," a branded title tied to new FanDuel brand ambassador Ariana Madix, along with an exclusive Monopoly Live launch, as key drivers of engagement.

"The main focus and push for us from an iGaming perspective is around acquiring those direct-to-casino customers," Jackson said, adding that a smaller sportsbook business earlier in the year had limited cross-sell into casino but that FanDuel now has "a bigger base" to convert.

"We can see a very clear distinction there. The direct casino, so the slots, growing very strongly," Jackson said, contrasting slots momentum with softer table games performance tied to that smaller sportsbook base.

Virginia Seen as Closest New iGaming State

Asked about the outlook for new state legalization heading into 2027, Jackson said Flutter still expects to add at least one new iGaming state by the end of 2027.

"I think Virginia has probably got furthest of any of our target states. I think there's some interesting opportunities around D.C. But then there's a bunch of them where we're hoping to build traction, whether it's Ohio or other places," Jackson said. "We think it's going to happen, and there's some real pent-up demand for us to be able to deliver the income and product experience to customers in those states."

West Virginia online casinos have been in operation since 2020. Virginia has watched gambling state tax revenues with envy and hopes to follow Maine in being the next US online casino state.

Guidance Trimmed as Flutter Prioritizes Growth Over Margin

Flutter trimmed its full-year 2026 US revenue guidance to $7.4 billion at the midpoint, down $395 million from its previous outlook but still 6% growth year-over-year, and cut full-year US adjusted EBITDA guidance by $210 million to a $760 million midpoint, an 18% year-over-year decline, as it increases investment in its sportsbook and gaming proposition. The company said it is "moving from a focus on margin growth, to prioritizing AMP growth and customer value" in iGaming, a shift it argued would support long-term market share gains despite near-term profitability pressure.