MW Sports bettors keep winning. Here's how much that could hit profits at DraftKings and FanDuel.

By Weston Blasi

Through week 9 of the current NFL season, favorites are covering the spread at a high rate (56.1%) compared to just 43.9% for underdogs.

Sports-betting sites DraftKings and FanDuel are facing financial pressure from bad betting outcomes and prediction markets.

Sports bettors have been beating the house more than usual lately, and that's bad news for DraftKings and FanDuel.

DraftKings $(DKNG)$ reports earnings on Thursday, while FanDuel parent Flutter Entertainment $(FLUT)$ reports on Nov. 12 - and both are expected to highlight some growing challenges that many sportsbooks are facing.

Following a March Madness basketball tournament that featured odds-on favorites winning at a record 82% rate, sports fans have continued their dominance over betting sites through the rest of the year, analysts say, leading to projected revenue drops in the tens of millions for DraftKings and FanDuel.

"Given unfavorable outcomes in Q3 and Q4 (to-date), we now expect both management teams to cut full-year Ebitda guidance by $50M+," Bernstein Societe Generale group analysts Ian Moore and Nosher Ali Khan wrote in a note Monday.

What do unfavorable sports betting outcomes look like? Basically, that casual bettors have outsmarted the house.

Sportsbooks use data, models, public opinion and expert analysis to set odds, but they're not trying to achieve a perfect balance of bets on each side of a game. So to mitigate risk when popular teams attract lots of bettors, sportsbooks adjust the odds to make the other side more appealing in order to limit their exposure. In unbalanced scenarios, sportsbooks often root for a specific outcome - such as the Toronto Blue Jays to win the MLB World Series over the weekend - and many of those outcomes have not been going their way of late (see: the favored-to-win Los Angeles Dodgers winning the World Series, instead.)

Bernstein's analysts pointed to several high-scoring games (fans like to bet on more points), and teams that are favorites. The NFL is the most popular sport for fans to bet on, so unfavorable outcomes on NFL games for sportsbooks can be a real problem costing millions of dollars. For example, FanDuel famously took a $74 million loss during a 2024 regular-season NFL game between the Detroit Lions and San Francisco 49ers, which ended in a 40-34 win for the favored Lions.

Through week 9 of the current NFL season, favorites are covering the spread at a high rate (56.1%) compared to just 43.9% for underdogs. Similarly, the "over" on total points in NFL games is winning at a 54.6% rate, according to Covers. Bernstein's analysts also mentioned costly NBA results for sportsbooks but didn't point to any specific actions, as the NBA season just started in October.

And DraftKings has acknowledged that these types of outcomes impact its bottom line.

"If not for customer-friendly sport outcomes in March, we would be raising our fiscal year 2025 revenue and adjusted Ebitda guidance," CEO Jason Robins said back in May.

Bernstein's analysts wrote they "expect some relief" in the near term on betting outcomes, as wagering on big events tends to normalize over longer periods.

Those unfavorable betting outcomes are among the factors that led Bernstein analysts to adjust their price target for DraftKings to $50 from $55, and their price for Flutter to $315 from $320.

See: World Series Game 7: Why betting companies like DraftKings were rooting for the Blue Jays over the Dodgers

And it's not just a run of bad luck in betting outcomes that investors will be watching with upcoming earnings. A new type of competitor is also emerging for DraftKings and Flutter: prediction markets.

Prediction markets allow customers to use event contracts to risk money on the outcomes of events including elections, sporting events and Federal Reserve decisions, among many others. Investors have wondered if the rise of prediction markets will eat into the market share of traditional sportsbooks, or even compete for the same customer base.

Prediction market Kalshi surpassed $1 billion in monthly contract volume in mid-September, the same month that both the NFL and college football seasons began. Some $538 million worth of contracts were traded on Kalshi between Sept. 27-28, and 98% of that volume was from sports-related contracts.

Prediction markets like Kalshi are governed by the Commodity Futures Trading Commission, while sportsbooks are legislated on a state-by-state basis.

So now, DraftKings seems poised to launch prediction-market offerings soon, after acquiring trading-contracts company Railbird Technologies in October. And FanDuel signed an agreement with derivatives exchange CME Group, though sports contracts were not mentioned in the announcement.

Shares of DraftKings are down 18% this year compared to a 10% drop for Flutter.

See: Here's why Wall Street is betting against DraftKings and FanDuel - and going all in on Polymarket and Kalshi

-Weston Blasi

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November 03, 2025 16:12 ET (21:12 GMT)

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