GAMING : Odds & Ends: keeping an eye on the ball

Research evidence excerpt

GAMING : Odds & Ends: keeping an eye on the ball

ut, we estimate, 70% of EV is attributable to

its US operations, FanDuel. Here the aggressive expansion of Federally regulated

prediction markets looks set to significantly dampen growth and moderate margin

expansion. These may eventually be curtailed in sportsbetting by legal challenge or

legislative change but this is a likely 1-3 years away. Meanwhile wider US political

sentiment on gambling is becoming less supportive, which could lead to slower state

legalisation, increased player restrictions and higher tax rates. We see downside risks

to consensus, our DCF-based target price points to downside whilst we think Fox

Corp's 16% stake option in FanDuel is unlikely to be exercised. Underperform.

Valuation methodology

Our GBp TP is the FX-adjusted equivalent of our USD TP.

Risks

To the upside:

Negative newsflow for Prediction Markets (to the benefit of regulated sportsbetting), such

as adverse legal rulings or regulatory or legislative progress in restricting PM's from

sports events; faster legalisation of online sportsbetting or iGaming across US states

than we allow for; greater success in Flutter's own PM offering than we anticipate;

stronger performance in key international markets like UK and Italy.

To the downside:

Continued unfettered share gains by Prediction Market players in sports gambling at the

expense of OSB operators; more competition from OSB rivals, resulting in higher

marketing expenses for longer; slower progress, or even new restrictions on

sportsbetting such as bans on more lucrative plays (e.g. parlays/ combos), or higher

state gaming taxes; weaker international performance, for example if the 'onshore'

market shrinks due to higher tax rates in the UK.

BNP Paribas Research Gaming 23 JUNE 2026 page 9