Navigating PMs, the World Cup and Regulatory Debates

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Navigating PMs, the World Cup and Regulatory Debates

Idea

July 15, 2026 04:00 AM GMT

Morgan Stanley & Co. International plc+MGambling | Europe Ed Young

Equity Analyst

Navigating PMs, the World Cup Ed.Young@morganstanley.comJamie Rollo +44 20 7677-1761

Jamie.Rollo@morganstanley.com +44 20 7425-3281

and Regulatory Debates Morgan Stanley & Co. LLC

Stephen W Grambling

We see PM strategy, World Cup trading outcomes, and Equity Analyst

Stephen.Grambling@morganstanley.com +1 212 761-1010

regulation as key debates. We preview upcoming Q2/H1 earnings

and continue to prefer scaled operators over suppliers; Entain Leisure and Hotels

Europe

(+90%) has highest upside and most optionality in our coverage. Industry View Attractive

Prediction Markets: a key swing factor for sentiment. We do not anticipate

material Q2 market-making revenues for Flutter (indeed, we model lower Q2

investment costs given no sign of a material upswing in activity). However, we see

the debate around PM strategy as a key topic for investors. As we outlined in this

note, we see market-making as a $200-400m opportunity and look for greater

clarity around the strategic direction for the company's direct and market-making

ambitions.

Strong World Cup engagement. Industry feedback is of strong engagement,

acquisition and volume growth. Generally, International operators have described

sporting outcomes as moderate (high margin games breaking runs of punter-

favourable results), though we expect a more adverse impact in the US given a

higher mix of player/goal-scorer markets (compounded by the NBA Finals impact).

Counter-intuitive UK trading strength in Q2. Our recent UK field trip reinforced

the picture of strong UK trading, despite the significant shock of higher RGD from

April.