Where to place your chips? Barclays backs Flutter as top gaming pick

Investing.com -- Barclays has named Flutter Entertainment (LON:FLTRF) its top gaming pick heading into the end of 2025, citing the company’s leading market position, global diversification and favorable outlook across digital betting.

In a sector-wide note, Barclays said, “Digital Gaming is our favorite gaming sector into year-end, as we expect either handle growth or hold (or both) will improve sequentially.” 

Analysts pointed to early signs of strong user engagement tied to the NFL season, noting that easier comparisons on both handle and hold provide “a better setup than over the last two years.”

The brokerage placed Flutter ahead of DraftKings, despite viewing both as the dominant players in digital betting. “Bigger picture, FLUT/DKNG remain the clear top two digital betting players, in our view, with a long runway for material TAM expansion (iGaming), rapidly scaling profitability, and still reasonable valuation compared to the broader internet sector,” Barclays said.

Flutter was singled out for its resilience and higher-quality profile. “ Between the two, our preference remains FLUT for its relatively higher-quality profile (leading market share, global diversification), despite UK tax risk,” the brokerage said. 

By contrast, “we see DKNG shares as being more linked (and therefore more volatile) around US sports results and Prediction market headlines.”

Prediction markets, which have drawn attention across the sector, were downplayed as a meaningful threat in the near term. 

Barclays said, “Potential disruption from Prediction markets are overwhelming investor airwaves, but we think shorter-term concerns are overdone, while longer term, most scenarios point to a larger total betting TAM available to FLUT/DKNG, with limited risk to core/ high-margin products.”

The analysts added that the structural advantages of incumbents remain intact. “Most importantly, Prediction markets will likely remain structurally disadvantaged in offering OSB’s fastest growth and highest-margin products, e.g.,  Sports SGP and iGaming.”

Metrics reinforced Barclays’ preference for Flutter. Same-state online sports betting handle growth slowed to 12% year-over-year in the first half of 2025 from 27% in 2024, but cash handle held steady as operators rationalized promotions. 

Meanwhile, NFL content showed promise, with average Week 1 viewership up 5% year-over-year, fantasy app downloads rising 14% and time spent up 12%, all improvements from last year.

Hold performance, which has been weak in past NFL seasons due to parlay exposure and player-favored outcomes, may also be turning. 

Barclays noted that Week 1 of the 2025 season was “off to a favorable start for bookmakers,” with only 25% of games hitting the over on total points compared to a long-term average of 49%, and average fantasy points per week at their lowest since 2010.

Barclays added, “Into year-end, our favorite names are FLUT, DKNG, PENN, and CZR,” but it named Flutter as the standout.