Gambling companies kept adding players through 2026, and their shares kept falling, and the reason the two things happened together is that the cost of winning a player has risen faster than the money that player brings in. Flutter counted 9 per cent more average monthly players in the United States in the second quarter and watched its US sportsbook revenue drop 15 per cent over the same three months. My view is that player counts, registrations, and account totals have stopped working as evidence in a business case, and that the 2027 plans being written this quarter need different numbers.
Key Takeaways
- Flutter reported 3,843,000 average monthly US players for the second quarter of 2026, up 9 per cent year on year, while US sportsbook revenue fell 15 per cent and the US sportsbook net revenue margin fell 170 basis points to 8.7 per cent, with 140 of those points attributed to higher promotional spending.
- Entain grew net gaming revenue 5 per cent in constant currency in the first half of 2026 and still left the FTSE 100 at the September review, effective 21 September 2026, after the United Kingdom raised Remote Gaming Duty from 21 per cent to 40 per cent on 1 April 2026.
- Brazil’s Secretaria de Prêmios e Apostas published SIGAP figures on 15 September 2026, recording 118,959,058 active betting accounts held by 31,821,805 unique bettors, so the account total counts the same person roughly 3.7 times.
- The practical consequence for operators is that a 2027 business case built on player or account growth now reads to a board as a promise of cost, and the measures that carry weight are contribution per player after promotional spend and the cost of a player still active twelve months on.
1. What changed my mind about player numbers?
Player counts stopped being evidence this year, and Flutter’s second quarter was the set of figures that did it for me. In the three months to June 2026, the company reported 3,843,000 average monthly players in the United States, which is 9 per cent more people than a year earlier, and over exactly the same period, its US sportsbook revenue fell 15 per cent, with the US segment down 6 per cent at $1.68 billion. I have listened to a great many operator presentations open on a registration number, and I have quoted those numbers back in my own analysis often enough that I am not making this point from a safe distance.
Flutter’s US sportsbook net revenue margin fell 170 basis points to 8.7 per cent, and the company attributed 140 basis points of that fall to increased promotional spending, with a further 70 points coming from sports results running against it. The extra players did not arrive on their own. They were bought, and the price of buying them showed up in the margin in the same quarter they were counted. Group adjusted EBITDA for the quarter was $508 million, down 45 per cent, and Flutter took $210 million out of the midpoint of its full-year adjusted EBITDA guidance on the same day.
2. Did the market work this out before the industry did?
Yes, and it has been repricing the sector all year rather than reacting to one bad quarter. Flutter’s shares were worth about $282 in September 2025 and about $90 a year later, a fall of roughly two-thirds, while DraftKings went from around $43 to around $22 over the same twelve months.
The clearest example arrived two days ago. On 22 September, DraftKings’ chief executive Jason Robins told a Wells Fargo analyst that the handle was up 15 per cent year on year month to date at the start of the NFL season, that the company still expects around $1 billion of adjusted EBITDA this year, and that it intends to lift marketing and customer promotions, possibly pulling forward investment it had planned for next year. The shares fell 4 per cent the following day to $20.92, and Flutter drifted down 1 per cent alongside them.
Read that back slowly. Growth was up, profit guidance was intact, the company said it would spend more to win customers, and it was marked down for saying so.
3. Is this only a United States problem?
No, and the British version is arguably starker, because the company involved was growing when it happened. Entain reported net gaming revenue of £2,545.3 million for the first half of 2026, up 7 per cent as reported and 5 per cent in constant currency, with online net gaming revenue in the United Kingdom and Ireland up 13 per cent to £640.4 million. Underlying EBITDA still fell 2 per cent to £479.3 million, because Remote Gaming Duty went from 21 per cent to 40 per cent on 1 April 2026 and Entain expects to offset only about a quarter of this year’s impact. FTSE Russell confirmed on 2 September that Entain would leave the FTSE 100 at the September review, effective from the opening of trading on Monday 21 September, after six years in the index.
Brazil supplies the other half of the argument, and it comes from the regulator rather than from a broker note. The Secretaria de Prêmios e Apostas published SIGAP figures on 15 September 2026, drawn from an extract dated 8 September and covering January 2025 to June 2026. They record 118,959,058 active betting accounts against 31,821,805 unique bettors. One person can hold an account with every licensed brand in the market, and plainly a great many Brazilians do, so the account total counts the same person roughly 3.7 times. Any market sizing built on Brazilian account numbers is out by a factor of about three and a half before it starts.
| Market | The 2026 number that gets quoted | What sits underneath it |
| United States | Flutter US average monthly players up 9 per cent to 3,843,000 in Q2 2026 | US sportsbook revenue down 15 per cent, net revenue margin down 170 basis points to 8.7 per cent, 140 of those points from promotional spend |
| United Kingdom | Entain UK and Ireland online net gaming revenue up 13 per cent to £640.4 million in H1 2026 | Group underlying EBITDA down 2 per cent, Remote Gaming Duty at 40 per cent since 1 April 2026, out of the FTSE 100 on 21 September 2026 |
| Brazil | 118,959,058 active betting accounts on the regulator’s own system | 31,821,805 unique bettors behind those accounts, roughly 3.7 accounts per person |
4. Why does this matter before the 2027 budget round?
Because the plan being written this quarter will be read by people who have already changed what they are willing to pay for. A budget that promises player growth now reads as a budget that promises cost, unless it also shows what each of those players is worth once the money spent to win them is taken off. That is a different document from the one most teams submitted a year ago, and it needs different numbers in it rather than a better story wrapped around the same ones.
There is a second change already legislated in the United Kingdom that makes the timing awkward. The Autumn Budget 2025 set a new 25 per cent rate of General Betting Duty on remote betting from 1 April 2027, with in-store betting and bets on British horse racing staying at 15 per cent, and abolished Bingo Duty from 1 April 2026. Anyone building a 2027 model on this year’s effective tax rate is modelling the wrong year.
The operators I talk to have mostly stopped quoting registration totals at me, which is progress of a sort, although a fair number of them are still reporting those totals upwards. I do not think this repricing reverses next year.
5. Boardroom Questions
- For each market we operate in, what did a retained player cost us over the last twelve months once promotional spend, bonuses and free bets are counted, and is that figure rising or falling?
- When we report player or account numbers to this board, are we counting people or accounts, and what is the gap between the two in our largest markets?
- What is our contribution per player after promotional spend, by market and by product, and which markets are negative on that measure today?
- If we increased acquisition spending next quarter, what evidence would we bring to this board that it pays back, and over what period?
- Which lines of our 2027 plan still assume this year’s tax rates rather than the rates already legislated for next year?
6. What to do before the plan goes to the board
Rebuild every market’s numbers on two measures before the 2027 plan is signed off: contribution per player after promotional spend, and the cost of a player who is still active twelve months after acquisition. Then reconcile account totals to unique people in each market, starting with the markets where one customer can hold an account with every brand. Registration and account totals either come out of the plan or get labelled as what they are, which is a count of sign-ups and not a count of customers.
Sources
1. Flutter Entertainment plc, Q2 2026 Financial Results, 5 August 2026. Revenue, average monthly players, sportsbook net revenue margin, adjusted EBITDA and revised full-year guidance. https://www.globenewswire.com/news-release/2026/08/05/3339154/0/en/flutter-entertainment-announces-q2-2026-financial-results.html
2. FTSE Russell (LSEG), FTSE UK Index Series Quarterly Review September 2026, announced 2 September 2026, changes effective from the start of trading on Monday 21 September 2026. https://www.lseg.com/en/media-centre/press-releases/2026/ftse-uk-index-series-review-september-2026
3. Entain plc, Interim Results for the six months ended 30 June 2026, 13 August 2026. Net gaming revenue, underlying EBITDA and the expected mitigation of the Remote Gaming Duty increase.
4. House of Commons Library, Budget 2025: Gambling taxation, research briefing CBP-10440. Remote Gaming Duty raised from 21 per cent to 40 per cent from 1 April 2026, a new 25 per cent remote betting rate from 1 April 2027 with in-store betting and British horse racing at 15 per cent, and Bingo Duty abolished from 1 April 2026. https://commonslibrary.parliament.uk/research-briefings/cbp-10440/
5. Secretaria de Prêmios e Apostas, Ministério da Fazenda, SIGAP betting data, extract dated 8 September 2026 published 15 September 2026, covering January 2025 to June 2026. https://sigap.fazenda.gov.br/
6. iGaming Brazil, Dados do SIGAP revelam GGR, depósitos e número de apostas esportivas no Brasil, 15 September 2026. Reporting of the SIGAP figures above. https://igamingbrazil.com/legislacao/2026/09/15/dados-do-sigap-revelam-ggr-depositos-e-numero-de-apostas-esportivas-no-brasil/
7. iGaming Business, Top of the stocks: why gambling shares have lost their shine, 21 September 2026. Share price comparison for Flutter and DraftKings between 18 September 2025 and 18 September 2026. https://igamingbusiness.com/finance/funding/top-of-the-stocks-gambling-shares-have-lost-their-shine/
8. 24/7 Wall St., DraftKings drops 4% as prediction-market spending plans stir margin doubts, 23 September 2026. Jason Robins’ remarks to a Wells Fargo analyst and the share price reaction. https://247wallst.com/investing/2026/09/23/draftkings-drops-4-as-prediction-market-spending-plans-stir-margin-doubts-flutter-entertainment-slips-robinhood-ticks-up/