Flutter-backed results drive optimism after long losing streak for bookmakers
After months of sweating it out, bookmakers have finally found some breathing room. According to Jefferies Equity Research analyst James Wheatcroft, sports betting margins in the second quarter are tracking at all-time highs—offering a rare win for the sector following several quarters of bruising results.
In a note to investors dated 27 July, Wheatcroft reported that May and June returns had significantly lifted average margins across the board. The numbers are eye-catching. May hit 11.2%, June topped 12.5%, pulling the quarterly average to around 10%—well above the long-term benchmark of 9.5%. It’s a stark turnaround and, for some, a long overdue one.
Flutter Gets a Boost on Margin Momentum
Flutter Entertainment was front and centre in Wheatcroft’s report.
The analyst resumed coverage of the Dublin-based gambling group with a bullish tone. Jefferies placed a price target of £284 (roughly US$379) on Flutter’s UK-listed shares. That’s a significant jump from its then-price of £220. And over in the US, the same target applied: US$380.
It wasn’t just optimism for optimism’s sake.
Wheatcroft pointed to stronger-than-expected revenue margins internationally. And Flutter’s broad presence—from Paddy Power in the UK to FanDuel in the US—meant the company stood to benefit across key markets.
“After several consecutive quarters of unfavourable sports results, [Q2] is on track to deliver a record sports margin outcome,” Wheatcroft wrote, echoing a sense of regained confidence.
Margin Growth Driven by Baseball and Basketball
Not all sports were created equal this quarter.
Wheatcroft gave a special mention to Oregon—where margins hit a remarkable 15% for wagers on basketball and baseball. That’s significantly above the global average, and even high compared to US norms.
The state’s tightly controlled sports betting market may partly explain the bump. With a limited number of operators, pricing can be a little more in favour of the house.
But there’s also the unpredictable nature of sport itself. Underdog wins, unexpected upsets, and games with low scoring margins tend to drive better results for bookmakers.
• Baseball and basketball were standout contributors in Oregon, delivering margins up to 15%.
Wheatcroft didn’t offer a detailed sport-by-sport breakdown for other states, but suggested similar trends were seen in select US markets.
Historical Context: A Rare Win for the Bookies
To put it into perspective, let’s take a quick look at historical performance. Here’s how second-quarter average sports betting margins have shaped up over the last five years:
| Year | Q2 Avg Sports Margin |
|---|---|
| 2020 | 8.2% |
| 2021 | 9.0% |
| 2022 | 9.4% |
| 2023 | 8.7% |
| 2024 | 10.0% (est.) |
Margins typically fluctuate between 8.5% and 9.5% depending on sports calendar quirks, customer behaviour, and sheer randomness.
So when the number breaks above 10%, it usually signals something unusual—or unusually good—for bookmakers.
What’s Fueling This Turnaround?
Several factors are likely contributing.
One, sports results have generally trended in favour of the house. Public-favourite teams losing, tight game spreads, and surprise outcomes can all skew margins upwards.
Two, the industry has seen better pricing models roll out, especially in in-play and microbetting markets. These offer quicker bets on things like the next point in tennis or the next pitch in baseball—and they tend to favour the operator slightly more.
Three, customer acquisition has shifted toward more seasoned bettors. That might sound counterintuitive, but newer bettors often get more bonuses and favourable odds, which can eat into margins. More experienced punters mean steadier revenue for the house.
Still, it’s not all champagne and victory laps. High margins don’t always translate to better player retention or long-term revenue.
Some insiders warn that if margins stay too high, punters might feel short-changed and eventually drift elsewhere. One quarter doesn’t make a year.
Market Reactions and Looking Ahead
Flutter’s stock responded positively in early trading sessions following the Jefferies note, although broader sentiment in the gaming sector remains cautious.
Investors are watching closely to see if this margin trend holds into Q3 and Q4.
Jefferies isn’t alone in its upbeat assessment, but analysts generally remain divided. Some argue the market may cool off quickly if favourites start winning again—or if regulatory shifts, especially in US states, begin to bite.
But for now, sportsbooks are enjoying the moment. After all, they’ve had their fair share of tough breaks recently.
And as Wheatcroft hinted, it’s been a long time coming.
