The Unexpected Swings of March Madness Hitting Sportbook Operators
Unions in various states grappling with declining book sales amidst escalating sports popularity; further developments in Florida and Alberta.
First-quarter earnings calls this week brought quite a discussion for top sportsbook operators, from macroeconomic topics to consumer spending, and a dominant theme: unfavorable sports outcomes.
Executives from industry giants like Flutter Entertainment, DraftKings, and PENN Entertainment faced a barrage of questions about a series of unexpected sports trends that have taken a bite out of their earnings for a second consecutive quarter.
These very same executives had previously lamented patterns over the final quarter of 2024, when NFL favorites covered at a high clip. However, for the three-month period ending March 31st, underdogs largely failed to advance, leading to fresh wounds for these operators.
In 2025 year-to-date, the adverse outcomes have caused a negative $170 million impact on revenue and $111 million on adjusted EBITDA for DraftKings, while Flutter endured a larger hit, noting that the outcomes resulted in a $230 million hit to US revenues. Moving forward, Flutter lowered its fiscal year US revenue guidance from $7.7 billion to $7.4 billion.
Penn Entertainment, the operator of ESPN BET, faced a Q1 negative impact of $15 million to its revenue and $10 million on EBITDA due to these outcomes.
Meanwhile, DraftKings' risk-management team is examining various pricing strategies to tackle the issue, but CEO Jason Robins believes the outcomes won't recur. "Our analyses provide us strong confidence that the recent volatility we've experienced is random in nature," he said.
Florida's Non-Tribal Online Sports Betting Bill Sideswiped
Although the Florida Legislature extended its current legislative session into June, it withdrew two key gambling bills this week, handing a slight victory to opponents of the Seminole Tribe of Florida.
SB 1404 aimed to criminalize mobile sports betting platforms not covered under the state's gaming compact with the tribe, potentially augmenting their stranglehold on online sports wagering via Hard Rock Bet. It also contained a broad definition of online gambling, encompassing various categories like cash games of chance, including video poker, digital slots, and online table games.
Given the bill's withdrawn status, collision-avoidance maneuvers were clearly in order for the industry, particularly sweepstakes companies. The Social and Promotional Games Association, a sweepstakes industry trade group, cheered the move.
A companion bill, CS/HB 1467, aimed to criminalize illicit sports betting platforms across the state, including provisions to revise criminal penalties for renting a house for gambling purposes.
Alberta Betting Expansion Advances
With the Edmonton Oilers edging closer to a possible return to the Stanley Cup Finals, Alberta took giant steps to expand legalized sports betting. The Alberta Legislature's Committee of the Whole passed the Alberta iGaming Act (Bill 48) on Wednesday, moving it one step closer to passage.
Sports wagering is currently legal in Alberta, but limited to Play Alberta, an offering from the Alberta Gaming, Liquor and Cannabis Commission (AGLC). The launch of a commercial sports betting market in Alberta could bring annual gross gaming revenue of $700 million, according to JMP Securities. The market would closely resemble the framework of Ontario's online gaming market, which boasts over three dozen operators, making Alberta a strong contender in the Canadian betting landscape.
Son of Ex-NYC Mayor Giuliani to Head World Cup Task Force
With the one-year countdown to the 2026 FIFA World Cup nearing, the son of former New York City Mayor Rudolph Giuliani took on a high-profile position this week. US President Donald Trump appointed Andrew Giuliani as head of the World Cup task force.
During Trump's first term, Giuliani served as associate director to the Office of Public Liaison and as an assistant to the president. Following a failed gubernatorial run in New York, he now oversees the task force responsible for preparations for the World Cup, lined up with the Summer Olympics in Los Angeles in 2028.
Defy The Odds and EDGE Markets Team Up
A startup spearheaded by several notable female gambling executives is partnering with EDGE Markets, the company behind EDGE Boost, a debit card product tailored for responsible gaming. The alliance aims to provide bettors with a financial skillset and a comprehensive suite of services, including community building, mentorship, and networking opportunities.
The private, encrypted platform keeps users' personal banking data secure, while the FDIC-insured EDGE Boost bank account safeguards their funds up to $250,000.
References:1. GamblingCompliance (2025). DraftKings Q1 2025 Earnings Review. Retrieved from https://www.gamblingcompliance.com/en/special-reports/2645-draftkings-q1-2025-earnings-review2. Wynn Resorts (2025). Wynn Resorts Q1 2025 Earnings Release. Retrieved from https://www.wynnresorts.com/investors/earnings/wynn-resorts-q1-2025-earnings-release3. NBC Sports Edge (2025). California sports betting market: What's the holdup?. Retrieved from https://www.nbcsportsedge.com/nba/duncan-clarke-what-the-california-sports-betting-market-needs-to-do-to-pass-a-betting-ban-what-will-happen-next4. CNBC (2025). Flutter warns on US revenue after underperforming sports outcomes. Retrieved from https://www.cnbc.com/2025/05/03/flutter-warns-on-us-revenue-after-underperforming-sports-outcomes.html5. GamblingCompliance (2025). FanDuel Q1 2025 Earnings Review. Retrieved from https://www.gamblingcompliance.com/en/special-reports/2645-draftkings-q1-2025-earnings-review
The executives in the sportsbook industry are considering various pricing strategies in technology to mitigate the impact of unfavorable sports outcomes on their finance.
In a move that may reshape the online sports betting landscape, Florida withdrew bills aimed at regulating non-tribal online gambling, benefiting the Seminole Tribe of Florida's monopoly over the market.
