Well, it looks like Flutter Entertainment, parent to FanDuel, just found out what happens when every basic bro's parlay hits (spoiler: it's not great for business). In short, the house doesn’t always win, apparently and Flutter shares proved it. Investors saw the stock drop 4.7% Tuesday after it announced a streak of unfavorable NFL outcomes in Q4. 

(Source: Giphy) 

How unfavorable you ask? Try a $438M hit because Chad from accounting finally got his "Bills -3, Chiefs ML, Cowboys over" parlay to hit. The damage is so bad Flutter had to cut their US guidance by about a third all while calling this their most “customer--friendly” outcome ever. Translation: Bettors cashed some checks and snapped some necks.

(Source: Investing.com) 

When it comes to the numbers, they’re as follows: A $390 million revenue hit and $260 million shaved off Adjusted EBITDA for the quarter. For the full year, U.S. revenue is now expected to be $370 million lower at $5.78 billion, while Adjusted EBITDA got clipped by $205 million to $505 million.

Now while some may see doom and gloom, here’s what actually matters: Flutter's still crushing it everywhere else. For instance, CEO Peter Jackson and team are holding the line on their long-term growth projections, pointing to a 15%-17% compound annual revenue growth rate through 2027. They’re also promising EBITDA margins will expand by 13 percentage points to hit 25%. Basically, Flutter’s official stance is: “Yeah, we lost a hand, but we’re still in the game.” 

(Source: Shares Magazine) 

Outside of the U.S., Flutter actually caught some breaks. Favorable results in the English Premier League (read: bettors’ bad picks) meant revenue and EBITDA across its UK and Ireland markets are expected to come in 1%-2% higher than previously guided.

Now, I’m sure you’re reading this wondering: How does this even happen to a sports gambling company? Well, look no further than FanDuel, the U.S. market leader in Same Game Parlays (SGPs). If you’re not a degenerate and you don’t understand what that means, here’s the gist: These SGPs with juicy, high-margin bets that combine multiple outcomes in a SINGLE friggin’ game—might’ve been a double-edged sword here. Of course, while they’re normally a gold mine for bookies, a streak of predictable NFL outcomes meant parlay payouts piled up like bad calls against your fantasy team.

(Source: Giphy) 

Naturally this has analysts like Paul Leyland of RP Financial Updates noting that FanDuel’s heavy reliance on SGPs likely made it more vulnerable to this kind of rough patch compared to competitors like DraftKings, which saw a less significant dent (even though misery loves company as their shares slid 1.5% in sympathy to FanDuel). 

At the end of the day though, while everyone's losing their mind over one bad quarter (like this is their first time seeing variance), Flutter's still the heavyweight champ of online betting. They're basically the Netflix of gambling - yeah, sometimes they drop a "Jupiter Ascending," but they're still the ones to beat. Especially since zooming out, their fundamentals still look solid. 

(Source: Giphy) 

Of course, this definitely is a wake-up call for the sports betting industry. Flutter’s NFL debacle is a reminder that even the best-run sportsbooks are just one bad streak away from getting blindsided. As Leyland so eloquently put it, “The problem with Black Swans, both in ornithology and in risk metaphor, is that they are not as rare as people think.”

But, but, but… remember, in the gambling business, sometimes you're the windshield, sometimes you're the bug. And right now, Flutter's just dealing with a lot of bugs named Brad who finally got their parlays right. So even though Flutter’s Q4 flop is a reminder that the house doesn’t always win, the company isn’t exactly folding its hand. This is just the cost of business when you’re dominating, and your market share mimics a digital Vegas Strip. 

For now, keep an eye on Flutter and place your “bets” accordingly, friends. As always, stay safe and stay frosty! Until next time…

P.S. In the grand scheme of things, IF Stocks.News premium isn’t for you, you can always go back to trading and investing the same way you are now. The worst you are out is a measly $20 dollars—so why not take the leap and see EXACTLY how 2,000+ premium members are uncovering opportunities most traders never see? It’s a no-brainer. Click here to check out Stocks.News premium today… 

Stocks.News does not hold positions in companies mentioned in the article.