Flutter vs DraftKings Stock Analysis – Which to Choose?
Flutter Entertainment (FLUT), the parent company of FanDuel, and DraftKings (DKNG) dominate the growing U.S. online sports betting and iGaming markets. While both benefit from the rapid legalization across the United States, investors must consider key differences in market share, profitability, and financial stability before choosing between the two stocks.
Flutter offers a superior risk-adjusted profile due to its international diversification, established profitability, and positive free cash flow. DraftKings, however, offers greater potential upside if it can continue its faster revenue growth and successfully scale into sustained, company-wide profits. The final choice depends heavily on an investor’s tolerance for risk and their investment timeline.
Market Leadership and Geographic Footprint
Flutter and DraftKings together control over 66% of the estimated $117 billion U.S. sports betting market. The U.S. market is still expanding, with only 30 states currently allowing online sports betting as of June 2025.
U.S. Market Share
FanDuel consistently holds the top spot in the U.S. market.
- FanDuel (Flutter): As of Q1 2025, FanDuel held 43% of U.S. sportsbook Gross Gaming Revenue (GGR) share and 48% of Net Gaming Revenue (NGR) share across the 24 states where it operates. Its online casino captured 27% of the iGaming GGR share.
- DraftKings: DraftKings operates in 25 states plus Washington, D.C. Recent estimates place its 2025 U.S. online sportsbook share at approximately 34%. Its online casino captured 24.3% of the iGaming GGR share.
Global Diversification
The biggest difference between the two stocks is their exposure outside the U.S.
- Flutter is diversified: Flutter has strong international operations, owning key brands in the U.K., Ireland, and Australia, where its SportsBet brand holds roughly 45% market share. This diversification provides stable cash flow and reduces reliance on U.S. results alone.
- DraftKings is U.S.-focused: DraftKings remains an online-only operator largely concentrated on the U.S. market. It lacks the geographic protection Flutter enjoys.
Financial Performance and Profitability
Flutter is a much larger company by revenue and has already reached profitability, while DraftKings is still in its heavy investment phase.
Key Financial Takeaways
- Profitability: Flutter turned profitable in 2024. Its U.S. business (FanDuel) reached breakeven in 2023 and reported an adjusted EBITDA of $400 million in Q2 2025. DraftKings remains loss-making on an annual basis.
- Cash Flow: Flutter generated $805 million in free cash flow in 2024 and has a strong balance sheet with net debt-to-adjusted EBITDA of 1.4x. DraftKings expects its free cash flow to turn positive by the end of 2025.
- Growth Rate: DraftKings has a higher revenue growth percentage (+37% in Q2 2025) compared to Flutter’s (+16% in Q2 2025). This is typical for a company with a smaller revenue base in its hyper-growth phase.
Valuation and Investment Risk
The companies’ current valuations reflect their differing stages of profitability.
Valuation and Balance Sheet Details
- Price-to-Sales: The two companies trade at a similar Price-to-Sales multiple, despite their large difference in revenue size.
- Profitability Gap: Flutter trades at a positive but high P/E ratio of 32.80. DraftKings’ losses make its P/E ratio negative, which reflects a lack of profitability.
- Leverage: DraftKings’ debt-to-equity ratio of 1.24 is notably higher than Flutter’s 0.54, indicating Flutter has a much stronger balance sheet.
Major Risks to Both Stocks
Both companies face new risks that have led analysts to lower price targets:
- Tax Hikes: Several states, including Illinois and New Jersey, have raised or proposed higher sports betting taxes in 2025.
- Hold Volatility: Quarterly earnings for both can swing based on the “hold” percentage (the amount of money the sportsbook keeps). Bank of America cited that FanDuel’s hold has underperformed since 2023.
- Prediction Market Competition: New markets like Kalshi offer event contracts regulated under the CFTC. They operate in all 50 states, can accept bettors aged 18+, and offer tax advantages, potentially drawing users away from traditional sportsbooks.
Comparative Strengths and Weaknesses
Investors should weigh each company’s fundamental profile against the industry risks.
Flutter Entertainment (FLUT)
DraftKings (DKNG)
Conclusion: Which Stock to Choose?
Choosing between Flutter and DraftKings depends on the investor’s outlook on the future of the American gambling market and their risk tolerance.
- For the Conservative, Stability-Focused Investor: Choose Flutter (FLUT). It is the market leader with a stronger balance sheet, international diversification, and demonstrated profitability. Flutter offers a safer way to invest in the U.S. sports betting boom while benefiting from consistent global cash flows.
- For the Aggressive, Growth-Focused Investor: Choose DraftKings (DKNG). It offers greater upside potential given its faster revenue growth and the expected dramatic expansion of its profit margins as it matures. This is a higher-risk play that hinges on the company successfully turning its growth into significant, sustained profits.
Given the current market headwinds, such as rising taxes, volatile betting margins, and new competition from prediction markets, Flutter appears to offer a superior risk-adjusted profile. However, many analysts suggest owning both stocks to capture diversified exposure to the expanding U.S. sports betting and iGaming sector.
Recommended