フラッター・エンターテインメント（FLUT）2026年第3四半期決算説明会：ガイダンス下方修正、米国の成長、ブラジルでの減損

主要なポイント

• フラッター・エンターテインメントが発表した2026年第3四半期のグループ売上高は2%増加したものの、不振なスポーツ試合結果やアルバータ州および予測市場への投資、英国でのギャンブル増税が影響し、調整後EBITDAは25%減少しました。
• 同社は、2026年通期の売上高見通しの中央値を3億ドル引き下げて176億1000万ドルとし、調整後EBITDA見通しを1億6000万ドル引き下げて24億9500万ドルとしました。
• ブラジル市場に対する慎重な見通しから、8億7300万ドルの非現金減損損失を計上しました。フラッターは、オンライン・スポーツベッティングおよびギャンブルの暫定的な禁止を受け、Betnacionalをブラジルにおける唯一のブランドとして事業を再編しました。
• 米国のスポーツブック事業の業績は、8月と9月にシェアを拡大し、経営陣の予想を上回りました。フラッターは、販促・マーケティング投資を高水準のまま2027年まで維持する計画です。
• 第3四半期末のレバレッジ倍率は4.6倍となりました。経営陣は自社株買いを一時停止し、事業の有機的成長に向けた投資と、中期的目標である2.0倍〜2.5倍に向けたデレバレッジ（負債削減）を優先しています。
• フラッターは、事業モデルの簡素化により、2029年までに営業費用および設備投資額（CapEx）でさらにグロスで5億ドルのコスト削減を見込んでいます。

主要財務データ

事業および営業業績

米国のスポーツブックおよびiGaming

FanDuelは、顧客への還元拡充と製品開発の加速により、8月と9月にスポーツブックの市場シェアを獲得しました。経営陣は、販促投資の拡大がアクティブ顧客数、賭けの頻度、賭け件数、顧客のシェア・オブ・ウォレット（支出シェア）の改善につながったと述べています。

当四半期中、顧客の賭け頻度は4%上昇し、賭け件数は15%増加しました。ワールドカップにより230万人の顧客を獲得・活性化し、その約3分の1が休眠顧客の再活性化によるもので、第3四半期の取扱高（ハンドル）の約6%を占めました。

第3四半期の米国のiGaming市場の伸びは、総ギャンブル収益（GGR）ベースで約13%へと減速しました。フラッターによるアルバータ州でのサービス展開は経営陣の予想を大幅に上回り、参入第1四半期でiGaming市場シェアの20%以上を獲得しました。

予測市場

「FanDuel Predicts」の10月の取引高は7月と比較してほぼ3倍に増加しました。同プラットフォームの10月のアクティブユーザー数は約14万人となり、継続率および利用頻度の指標はオンライン・スポーツブックの80%〜85%の水準に達しました。

フラッターはまた、複数の取引所やスポーツにわたりマーケットメイキング事業を展開しています。経営陣は、2026年にマーケットメイキングによる売上高5000万ドル、EBITDAで約4000万ドルを達成する目標を再確認しました。

国際事業

フラッターは、英国・アイルランド、イタリア、中東欧で市場シェアを獲得したと報告しました。経営陣によると、イタリアのSNAI事業のフラッター・プラットフォームへの移行は順調に進み、移行前の市場シェア水準を上回るまでに回復しました。

英国およびアイルランドでは、ワールドカップでの過去最高のエンゲージメントに続き、ギャンブル事業が2桁成長を記録しました。フラッターは、顧客向けのマーケティングおよび販促投資を維持しつつ、固定費の削減を進めています。同社は、増税への対応の一環として、英国およびアイルランド事業で約1,400人の人員削減を発表しました。

経営陣の見通し（ガイダンス）

経営陣は、米国および国際市場の双方でスポーツ試合結果が不利であったものの、第4四半期の基礎的な取引状況は予想通りであると述べました。改定された2026年の見通しには、ブラジル事業の閉鎖や追加のコスト削減施策も反映されています。

2027年の米国事業について、フラッターは販促費が2026年第4四半期と同水準にとどまり、純売上高マージンは前年比でほぼ横ばいになると予想しています。マーケティング強度も高水準が維持される見込みであり、予測市場への投資も同等またはそれ以上の水準で継続する可能性があります。

経営陣は、2027年の売上原価率が2026年と同様に売上高の約58%で推移すると予想しています。長期的には、構造的なグロス・ウィン・マージンおよび純売上高マージンの拡大を継続して見込んでいます。

国際事業について、経営陣は、コスト削減施策やイタリアを含む市場での力強さに支えられ、2027年のEBITDA成長率が5%〜10%のレンジの上限近くになると予想しています。売上高成長率は、ブラジル市場の影響や英国の税負担増などの要因により、このレンジをやや下回る見通しです。

フラッターは、2月に発表予定の第4四半期決算時に2027年通期の詳細なガイダンスを提供する予定です。

リスクと注目点

• 不振なスポーツ試合結果が第3四半期業績と第4四半期の取引の双方に影響を与え、2026年の業績見通し下方修正の要因となりました。
• ブラジルでは、オンライン・スポーツベッティングおよびギャンブルの暫定的な禁止を受け、大きな規制上の不確実性が続いています。
• 予測市場事業者が同分野でのメディア広告費を増額したため、広告コストが高騰し、FanDuelのシェア・オブ・ボイス（広告露出シェア）を圧迫しました。
• 英国におけるギャンブル増税は利益率の圧迫要因となっており、大幅な事業構造改革が必要となっています。
• 予測市場の経済性、特に顧客生涯価値（LTV）や規制枠組みについては、引き続き不確実性が残っています。
• 4.6倍のレバレッジ倍率はフラッターの中期的目標である2.0倍〜2.5倍を上回ったままであり、これが自社株買い停止の理由となっています。

アナリスト質疑応答のハイライト

• 予測市場戦略：経営陣は、マーケットメイキングを短期的な収益・利益の機会と説明する一方、消費者向けプラットフォームについては長期的なフランチャイズ投資であると位置付けました。顧客獲得単価はスポーツブックを大幅に下回っているものの、収益性（リターン）は依然として不確実です。
• 米国の販促費：フラッターは、顧客還元の拡大によってFanDuelが市場をリードしたというよりは、概ね市場水準に並んだと述べました。経営陣は、顧客データとパーソナライゼーションを活用して販促効率を向上させる意向です。
• スポーツブックのマージン：パーレイ（複合賭け）の浸透率向上が構造的なグロス・ウィン・マージンを継続的に支える見込みですが、増額された販促費の通年化により、2027年の純売上高マージンは概ね横ばいになると予想されます。
• 製品開発：FanDuelは18か月前と比較して6倍のペースで製品のアップデートを展開しています。最近の改善には、キャッシュアウト機能、オッズ・市場のロード時間短縮、ソーシャル・ベットシェア機能、パーソナライゼーションなどが含まれます。
• 資本配分：経営陣は高リターンの事業内投資（オーガニック投資）と負債削減を最優先とします。株主還元については、レバレッジが同社の中期的目標レンジに近づいた段階で再検討される可能性があります。
• コストおよびポートフォリオ戦略：フラッターは2026年以降、設備投資額（CapEx）がさらに減少すると見込んでいます。経営陣は現在、事業売却を進めるよりも、グローバル規模の強みを引き出すことに大きな価値を見出しています。

決算説明会 文字起こし全文

決算説明会の完全なトランスクリプト

経営陣による説明

Operator

Hello, everyone. Thank you for joining us, and welcome to Flutter Entertainment Third Quarter 2026 Earnings Call. [Operator Instructions] I will now hand the conference over to Paul Tims, Director of Investor Relations. Please go ahead.

Paul Tymms

Hi, everyone, and welcome to Flutter's Q3 update call. With me today are Flutter's CEO, Dan Taylor; and CFO, Rob Coldrake. After the short intro, Dan will set out his immediate priorities alongside the operational progress we made in Q3. Rob will then share an overview of our Q3 financials as well as updated details on our outlook. We will then open the lines for Q&A. Some of the information we are providing today, including our 2026 guidance, constitutes forward-looking statements that involve risks, uncertainties and other factors that could cause actual outcomes or results to differ materially from those indicated in these statements. These factors are detailed in our earnings press release and our SEC filings. In addition, all forward-looking statements are based on current expectations, and we undertake no obligation to update any forward-looking statement, except as required by law. Also in our remarks or responses to questions, we will discuss non-GAAP financial measures. Reconciliations are included in the results materials we have released today available in the Investors section of our website. And I will now hand you over to Dan.

Daniel Taylor

Thank you, Paul. Good morning, everyone, and thank you for joining us. I'm pleased to be speaking with you all for the first time as CEO of Flutter and for this opportunity to set out my initial thoughts and priorities. I'm now almost 5 weeks into my role as CEO. But having worked at Flutter and in the industry for many years, I know the business well. Building on my experience in international markets, I spent a lot of time in the U.S. with the FanDuel team over the last 5 months. I've been really impressed with the team on the ground and the time I spent in the business has been critical in helping me determine our immediate priorities.

Across Flutter, we have a portfolio of fantastic brands, unmatched in our category around the world.

We have exceptional talent with deep sector expertise and a set of amazing products our customers love. We've built global leading scale over the last 5 years, but we will be more demanding of the benefits this can deliver. We need to simplify how we operate and move faster. And we need to remove costs so that we can invest more in the right areas that benefit our customer proposition and the opportunities that best position us for growth in the long term. Our Q3 performance shows that the actions we have already taken are the right ones. While sports results went against us, underlying performance in the U.S. was ahead of expectations. And in international, we delivered market share gains in our core markets. I have 4 immediate operational priorities, which will require clear leadership and tough decisions. We will remain disciplined in our investments, focused on improving our cash flow conversion and deleveraging the balance sheet. My first priority is to build on our U.S. leadership position. I strongly believe we have the best assets to capture the North American opportunity, which still has a very long run way of growth ahead. But we need to operate at pace and deliver relentless product innovation while investing with discipline where we see long-term opportunities. The U.S. market is highly competitive with our decisive actions to increase share of wallet by returning more to customer and to accelerate our product road map are beginning to pay off, delivering market share gains in August and September. I'm confident we are taking the right decisions to deliver fans long-term success.

I believe sportsbooks offer a superior proposition versus prediction market, and our consumer research and customer analysis continues to support this conclusion. We are, however, beginning to see an impact on our media costs as prediction market operators increase their spend. The duration of this trend will depend in part on how the vector landscape develops. We need to continue investing behind the Founder brand in a disciplined way maintaining competitive levels of marketing intensity.

Over the last 4 years, we have transformed under Casino from a distant third place into the market leader. We must now ensure we maintain our laser focus on our customer proposition. Player engagement in Q3 was strong; however, revenue growth was impacted by competitive dynamics and market moderation as the U.S. iGaming states move through the maturity cash. Looking forward, the potential for new states to regulate or gaming provides very significant upside as evidenced by our very strong launch in Alberta in July, we have already achieved more than 20% market share across Q3. significantly surpassing our launch in Ontario.

Second, prediction markets represent a very meaningful incremental opportunity for Fanjul. We must build a strong position now investing with discipline and maintaining flexibility to adapt quickly as regulation develops. In the last few months, the FanDuel predicts product has been transformed, and we're just getting going. The changes have been enabled by our integration on the Crypto.com, and delivery of our Fanduel One app solution, leveraging the core sports co-base and experience. While we always have more work to do, our product is now generally competitive. Our customers are responding very well with retention and frequency metrics already 80% to 85% of OSB, and we have a clear pipeline of further improvements from here.

We will leverage the nationwide strength of the Foundry brand to acquire customers, and we can now service existing customers nationwide. We are investing at a level that we believe will position us well for the long term. balancing the need to operate at scale in targeted states against the regulatory uncertainty in this space. Initial trading volumes are encouraging, almost trebling in October when compared with July, reflecting our accelerated product road map. The behavior of the customers we acquire look like typical sports for customers, giving us confidence in their long-term value. We're also using our leading expertise in pricing sports events to participate as a market maker. -- and help fund our prediction market acquisition spend. We are making excellent progress here, and we're on track to deliver our market-making guidance for 2026.

Third, in international, we have built a portfolio of regional powerhouses with #1 positions in many of the world's largest regulated markets. Our scale allows us to invest in better products and customer experiences, while our diversified business delivers a resilient growth when individual markets face regulatory or economic change. My immediate focus is on delivering continued product improvements and customer experiences to drive consistent execution sustained growth and further market share gains. We've made good strategic progress during the quarter with market share gains in the U.K. and Ireland, Italy and across CEE.

Our successful integrations in Italy, UKI and PokerStars are unlocking meaningful revenue upside and cost benefits. We're taking share in Italy on the back of our Advantage product and having delivered this into SNI, we see plenty of further upside to come. In the UKI, we saw strong double-digit gaming growth on the back of record engagement during the World Cup, and we believe our recently announced restructuring rightsize the business going forward, persisting as well to take market share gains in the post-tax environment by protecting our investment in the customer. We are clearly very disappointed with the government provisional measure, banding online sports betting and gaming in Brazil.

With the right regulation, Brazil could still be an attractive market. However, the level of uncertainty and the already challenging regulatory environment that developed prior to the ban, I mean we're taking a cautious view of the outlook at this point in time. determining the noncash write-down recorded in our Q3 results. Following the ban, we have acted decisively. We took immediate steps to restructure our business to focus on bet national as our sole brand in Brazil. and are ready to resume operating if and when the market returns. Despite the regulatory challenges we have faced over the last 12 months, I feel very confident that our diversified international portfolio is now well set to leverage the transformations and cost efficiencies we have delivered to take full advantage of our labor scale to continue to take the market share and deliver against our target of 5% to 10% annual growth.

Fourth, simplifying our operating model. The next phase of Flutter will be more streamlined to maximize the benefits of scale and ensure we can do noncustomer-facing work once. This will help us remove complexity move faster, reduce costs and improve cash generation, allowing us to invest organically in the areas that deliver the highest returns whilst also deleveraging the balance sheet. In addition to our existing international cost transformation, and U.K. gaming tax mitigation programs, we expect to deliver an additional 500 million in gross operating costs and capital expenditure savings by 2029. And the work to deliver this is well underway.

In the U.S., these efficiencies create the room to invest behind our next stage of growth. Internationally, we expect these benefits to support our previously projected long-term 5% to 10% growth while helping protect adjusted EBITDA margins through regulatory and tax changes. Looking ahead, I'm encouraged by the momentum we are building. We're making deliberate choices to secure Family's long-term success. In international, consistent execution and further scale benefits should enable continued profit growth despite regulatory pressures. Realizing the full potential of Flutter's exceptional set of assets and opportunities will require hard choices, faster decisions and strong execution.

I know confidence is earned through delivery, and that is what I'm focused on. While I'm only 5 weeks into my new role, I'm already clear on my immediate operational priorities. And I look forward to sharing more on our strategy alongside our Q4 results in February. And with that, I'll now turn it over to Rob to talk you through the financials and outlook.

Rob Coldrake

Thanks, Dan, and hello, everyone. I will cover 3 areas today: Q3 results, balance sheet and capital allocation and our updated guidance and outlook. Let me start with the Q3 results. U.S. sportsbook performance was ahead of expectations, and we gained market share. In international, consistent execution and the benefits of our transformation programs delivered share gains across core markets, including UKI and SCA. This underlying momentum was partly offset by adverse sports results, resulting in group revenue growth of 2% in Q3. Adjusted EBITDA declined 25%, reflecting our investments in Alberts from prediction markets, alongside higher U.K. gaming taxes, partly mitigated through cost actions.

While reported EBITDA was down, this reflects deliberate investment and specific external factors rather than a deterioration in the underlying trajectory of the business. As Dan mentioned, we have taken a prudent view on Brazil, resulting in a noncash impairment charge of $873 million. This charge, together with an increase in legal loss contingencies drove reported net loss in Q3. Moving to the balance sheet. We ended Q3 with leverage of 4.6x. While this is elevated, we expect to deleverage significantly through 2027 and remain committed to returning to our 2 to 2.5x target range over the medium term.

Our capital allocation priority is clear: continue to invest behind our highest return growth opportunities deleverage the balance sheet and only then consider returning additional capital to shareholders. As a result, we have decided to pause the existing share repurchase program for the foreseeable future. Free cash flow, including financing CapEx and excluding player funds improved by 22% year-over-year. We also successfully refinanced our revolving credit facility and term loan A extending our debt maturity profile, providing additional financial flexibility at competitive rates. Now moving on to our updated guidance for 2026 and our early thinking about U.S. investment into 2027.

Q4 trading has been in line with our expectations on an underlying basis although sports results have been unfavorable in both the U.S. and internationally. We have therefore updated our full year guidance to reflect the unfavorable Q3 and Q4 sports results and the closure of Brazil, partly offset by further cost actions. This reduces our full year group revenue midpoint guidance of $300 million to $17.61 billion and a reduction in full year adjusted EBITDA guidance of 160 million to $2.495 billion. Additionally, group transaction, restructuring and integration costs will now be approximately $620 million, reflecting an increase of approximately 120 million from our previous expectations, primarily due to the increase in legal loss contingencies.

Additional detail on our 2026 guidance is available in today's release. Looking further ahead to 2027 in the U.S. Improving customer trends and sportsbook performance give us confidence to continue reinvesting underlying growth into the customer proposition. Our promotional spend is expected to remain at similar levels in Q4 and throughout 2027, resulting in a broadly flat net revenue margin year-over-year. And at this early stage, we expect our 2027 marketing intensity to remain at the elevated levels we have observed for 2026. On prediction markets, as Dan outlined, we believe we are increasingly well positioned to capture this opportunity. We expect investment in this area to continue at similar or higher levels given the early momentum we are seeing.

We also expect cost of sales as a percentage of revenue, tracking at 58% for 2026 to remain at the same level in 2027. So while Q3 reported earnings were impacted by investment sports results and some one-off items, I'm encouraged by the underlying trajectory of the business. We are improving the U.S. proposition, continuing to invest behind our strongest growth opportunities and taking a disciplined approach to capital allocation and deleveraging. Together, these actions give us confidence that we are building a stronger and more valuable flatter for the long term.

As usual, we will give our full guidance for 2027 alongside our Q4 results in February. And with that, Dan and I are now happy to take your questions.

Operator

[Operator Instructions] Your first question comes from the line of Ed Young from Morgan Stanley.

質疑応答

Edward Young

Two questions, please. First of all, thank you, Dan, for the initial strategic commentary you set out in the shareholder letter and your prepared remarks, even though it's early, it's very useful framing. Could I ask you to give a bit more color on capturing the prediction markets opportunity? How do you see the relative importance of scaling on the B2C side versus, say, market making and how to get the right balance of investment given the regulated to uncertainty, and frankly, your late start. And then the second is on Italy. You've talked about market share gains there. The presentation clearly shows that's really being driven by CECL.

You've had SNI integrated for a little while now. Is there anything that's holding back SNI from starting to capture the same level of growth as CCLohow should we think about the ability for NI to be a contributor to market share gains through '27.

Unknown Executive

Ed, look, thank you for the I'll take those in turn. So look, on the predict side, we've talked about, say, 3 things. The first thing on the product side, which I think is really an important enabler is being candid, the product when I first went over to fan in the spring was not competitive. I think the team have made tremendous progress on the product in the last few months, and the pace of delivery is really, really impressive. And -- the results we're seeing are very good. We obviously have 1 app live now, but it's really only been live at scale to customers since the start of the NFL season. The results we're seeing from that in terms of metrics around retention, frequency starting to look a parapercentage. It's starting to look a lot like our sportsbook in terms of those metrics. And we had about 140,000 actives on the platform in October. But look, you're right in saying it's early days, right? And the -- it's hard to get the balance right in terms of the economics there.

We're acquiring a materially lower CPAs than our sportsbook. And we can see a pathway to materially improving the LTVs as we go forward. We've got our own FCM license and now available to us, which will be a step in the right direction there. So there's lots of things we can do to keep improving the economics, but they are uncertain. And we need to be disciplined about the returns we get. I think we're confident our returns in more -- less returns in states where we have a higher prospect of OSB. That gives us more certainty. But as the economics and the player behavior start to evolve over the next few months, I think we'll get a clearer view on how much we can spend economically on the B2C side. as we only really been going for a couple of months in Anglo there.

On the B2B side, with market making, this is really at the heart of Flutter's capabilities. We've made great progress there. We're now trading across multiple exchanges, across multiple sports. I think our ability on sort of the complex parlays is a real differentiator for us. We're on track to deliver the guidance that we did, and we've only really been live for obviously second half of this year. So that's a really exciting near-term revenue and profit generator. The B2C side is probably a longer term. We need to build leverage the land for the long-term franchise. On Italy, I'm pleased you asked that question. I think it's a great -- if I look at when we acquired the SNI business, one of my hypothesis was is it's an amazing brand. It's probably one of the iconic brands in Italy. But I think the product on it was poor.

And I think that we have the very best product in the market on the best for us. We have the best gaming products. I feel very good about it. We migrated the SNI product onto the SCA platform in the summer. We balance -- you always have a bit of a drop in market share at the point of migration and we bounce back to the premigration levels faster than any migration we've ever done in flutters history. And I think the trajectory is very good from here. So we saw a bit of degradation prior to the migration, which was on the old product. It dropped at the point of migration born straight back and is now higher than it was pre migration. And it now has all the same product features, capabilities and sort of drivers that has underpin the CECL strength. So I'm very excited about where we take SNI over the next 12, 24 months and longer. I think it's a big opportunity for us.

Operator

Your next question comes from the line of Brandt Montour from Barclays.

Brandt Montour

So I want to follow up on the iGaming commentary. I think you said moving through the maturity curve. You guys obviously have a ton of international data and history with iGaming products. What does the maturity curve look like to you when you look at your historical data sets? Does this feel like a market that can kind of bounce back to growth levels that we saw earlier this year? Or does it generally follow a pretty obvious curve there?

Daniel Taylor

Thanks, Ben. So if you look at Q3, I think the market grew about 13% on a GDR basis, which is below where we saw the growth in H1. And that doesn't hugely surprise as we think that is, to your point, consistent with the level of moderation in growth that we would expect for water markets in these states that have been around for some time now. we have seen an interest to market long-term growth at high single, low double digits for the long term. So I don't see that. That wouldn't be the case here. But we've -- but we are seeing that moderation. Obviously, for Fanduel, we had some specifics in Q3 last year, where we had a very strong release of a game, which meant we were lapping that, which put some pressure on to our comps. But look, we feel very good about our competitive proposition and how we sort of maintain that and grow that going forward.

The other thing I'd add on the gaming side is in the quarter, we obviously went live in Alberta. Alberta is the first new gaming state. I know it's a Canadian province but for some time. And the success there is astounded us. We -- our pace of customer acquisition, was materially faster than Ontario. We've reached 20% plus market share on the gaming side within the first quarter, which is already well ahead of where we thought we would be, particularly given there was existing gray market operators in that state for hand. So I think the success in Alberta gives us real confidence and conviction about the opportunity from iGaming as we expand the TAM. And obviously, we're only penetrating from a term perspective, 10% of the U.S. population today, and there's a lot more to play for there.

Brandt Montour

That's really helpful. And then a follow-up question maybe for Rob on sports net revenue margin, looking for a number roughly flat year-over-year, and it's as you said, reflecting continued promotional level. Can you just maybe double-click on that? If we think about promotional level at the exact same level then you're not necessarily implying a lift in any structural margin from Parlay mix. And so maybe that's not the right way to read that. And if you are going to have a slightly higher promotional spend annualizing what you did in the second half of '26. What kind of structural parlay lift would you need to see in '27 year-over-year to pay for that uplift in promotional spend. Hopefully, that makes sense. .

Rob Coldrake

That does make sense. So Yes, we are seeing the net revenue margin when we look out to 2027 at the moment being relatively consistent. We've always said that we expect further parlay penetration over time and enhancing our structural gross win margins, and we expect that to continue in 2027. If you think about levels of generosity in 2026, we deliberately upped our investment from Q2 onwards. We're going to need to annualize that spend year-on-year, which means that the promo cost goes up, and that's how you kind of get back to a similar net revenue margin.

I think when you look out longer term, I think we are confident that we can still grow the overall structural margins and the net revenue margin within the business. I think we see this as more kind of temporary to medium term given some of the dynamics that we're seeing in the market at the moment.

Operator

Your next question comes from the line of Barry Jonas from Tui Securities.

Barry Jonas

Any early thoughts on potential implications from the U.S. midterm elections whether that's OSB I gaming legalization, further PM regulation or really anything else that could impact you?

Daniel Taylor

Bay, I'll take that. First -- so we were disappointed with the results in Nevakar where the ballot didn't go in our favor. But I think we'll take something from that. When we look at the broad opportunities, I think we feel good about the prospect of future OSB and iGaming regulation over the coming years. We know that there's a need for the tax dollars, and we know that we can deliver through regulation, the protection for consumers that is required. And so we -- without reminding us we're slowly at half of the U.S. with OSB and 10% from a gaming respective. And I'm not going to try and tell you which states in which order, but we feel good coming through this that there is a strong pipeline of further state openings.

Barry Jonas

Great. And then just for a follow-up. I just wanted to ask a little bit more about market making. Just given the early success you're seeing there. Curious if you can give any thoughts on how big that business could ultimately get for Flutter and also how to think about the level of risk present around unfavorable sporting outcomes.

Rob Coldrake

Yes. Barry, I'll pick that 1 up. I think as Dan said earlier, we're making very good progress with the market making decent I think with our expertise, particularly on correlated events markets, parlays and complex products, we certainly see an advantage for us in this space. I think that at the moment, we're focusing on delivering our forecast for this year. We're still very confident that we'll deliver on the market-making guidance that we set out at Q2 in terms of $50 million revenue being around circa $40 million EBITDA for this year. And then we see that building next year. We're not paying specific numbers on it at the moment. We are working with more exchanges now, and that will give some more opportunity. But we're really pleased with the progress that we're making.

Operator

Your next question comes from the line of Jordan Bender from Citizens JMP.

Jordan Bender

Everyone the -- so when you gave the original increase in marketing last quarter for the back half of this year, the messaging was more around your customer acquisition activation. In your prepared remarks, you said some of the media costs that you're seeing are the media piece from prediction markets is basically intensifying the environment. I'm just trying to understand, has the investment spend that you guys laid out last quarter kind of turned from being more opportunistic for the company to be more defensive, just given what you've seen during the NFL season.

And then, Rob, maybe on the follow-up here, the share buyback program now paused. Is this kind of a conversation that we start to have once you get leverage back into the 2 to 2.5x range? Or is there some sort of level where the discussion starts up again.

Daniel Taylor

Thanks, Jordan. So look, I'll take the first 1 and then Rob will pick up on the second here. Look, the change that we was communicated by the team in Q2 was an uplift in promotional spend, if it wasn't the marketing media spend. So the uplift in promo is something that we're really pleased with the response to. I think that's underpinned the improvements we've seen in amps, in frequency, in back count and ultimately, share of wallet. And I'm pleased with that, and that's been a core part of the proposition and the team have, I think, lend into that and done an excellent job. And we expect, therefore, to continue that posture going forward. That's brought us from a promotional spend in aggregate level, broadly in line with the market.

I think that is what sets us up for the long term to be at that posture. With regard to the market -- the elevated marketing media costs, I think we have seen in Q3 this year, in particular, elevated media spend across the category. -- and thinking here about sort of brand marketing, digital marketing, et cetera. That was -- as a category was up more than 60% year-on-year in September, up more than 50% more than year-on-year in October, primarily driven by investment from some of the predict operators. And candidly, that does put pressure on asset costs. It also puts pressure on some of our share of voice. And we need to be disciplined about how we spend our marketing dollars, but we also need to protect and grow our brand region.

We're very lucky with the amazing brand that we have that we can amortize that spend across the whole country now. So there are 2 different points, I think, specifically, just to be clear, on the promo investment and then on how we're seeing the marketing environment in particular.

Rob Coldrake

With regards to the share buyback, I think we've been quite clear about our capital allocation priorities in the short term, and we'll continue to allocate capital efficiently and where we see the highest returns. At the moment, there's lots of organic opportunity within the business to do that. We're very focused on bringing the leverage down. As we said, it's 4.6% -- we think we've got excellent free cash flow generation into 2027, and we will delever at pace and move back towards the quoted leverage range in a medium term.

I think as and when we get there, and I do realize that at the moment, there is a compelling case for buybacks, but our focus is definitely on the organic capital allocation and deleveraging. And as and when we get back towards our quoted medium-term leverage ratio. It's definitely something that's on our list. We've always said that we will look at shareholder returns as well. So it is something we'll continue to consider.

Operator

[Operator Instructions] Your next call is from the line of Bernard McTernan from Needham & Company.

Bernard McTernan

Great. Maybe first, just would love you to talk about the sustainability of this U.S. acceleration growth in handle -- and how you think about retaining those gains? And then second, you talk about the early results from endureserve rewards? And is this -- and is the higher promotional activity that we're seeing right now concentrated in this program? Or is it beyond that in other areas as well, too? .

Daniel Taylor

I'll take the second 1 first, I think. So we're -- we launched the fund or Rewards program to the full base from the start of the NFL season. I think that's landed very well with our customers. We've seen a 7% uplift in perception of rewards and recognition from our and customers. And that isn't just do the wars program, but that has clearly been a very important part of that. I think beyond that, we've been leveraging some of the smart promotions and capabilities we've had around the group. We've got deep experience of how to deploy GND from our different brands across the international business. And we've been taking a lot of that capabilities in Defender to be really scientific and thoughtful about how we deliver it to the right customer at the right time as well.

So I'd say it's both of those things, and it's clearly resonated very well with customers. With regard to sort of handle uplift, look, I'm pleased to see the underlying customer men. I'm pleased to see the momentum in amps. I'm pleased to see the growth in bet count. We're seeing an average now each customer is betting twice more per week. It's good to see that frequency improvement. And a testament to the share of wallet. And I think there's further opportunities for us to grow that share of wallet. I'm not going to try and predict handle trends. Ultimately, we're focused on the revenue generation from the business. But look, I think we're pleased with the early signs from the changes the team have made and credit to the team for the way they've lent in and made those changes very quickly.

Rob Coldrake

And I think just to add to that point, I think as we mentioned earlier, I think we feel vindicated in terms of the investment that we laid out at Q2 and how that's working. And we've definitely seen a stabilization of market share. And we've taken some market share into Q3. We've definitely built on the momentum off the back of the World Cup. I think we're seeing the levels of growth in the market that we anticipated kind of mid-single digits on sportsbook, and that's something that we'd expect to continue into next year. We'll obviously come back and talk in more detail about our guidance for 2027. But it's important that we get a bit more of the key Q4 trading period under our belt as well with NFL in full flow. The NBA season haven't just kicked off just to understand where the momentum has taken us into next year.

Operator

Your next question is from the line of Ian Moore from Bernstein.

Ian Moore

Just picking up on that last thread on the NBA. Viewership has been super strong so far this season, but there's been some pretty notable, I guess, star player injuries -- how are you thinking about NBA handle this season and engagement versus last year given that? And has player availability had any noticeable impact on parlay mix or hold?

Daniel Taylor

Yes. Thanks,. Well, it's pretty early days on the NBA, as you know. I think there was some momentum held over from last year where there's a really exciting end to the season and the NIC wins. So I think we started the season in a good place, and there's some great fixtures to start the season with. I think so far, we're seeing it the form in line with our expectations. It's a long season, players getting injured in MBA. It's not a new thing. So that's something that we factor in. we are seeing quite a competitive market in terms of player entry insurance and the products that are out there. We've had some strong product offering in that in NFL and we continue to monitor that space as we go into the season.

Operator

[Operator Instructions] Your next question is from the line of Robert Fishman from MoffettNathanson.

Robert Fishman

With increased costs for the media and marketing in the U.S. that you've talked about, would you be reevaluating your go-to-market strategy and even willingness to work with some of the media partners like a Fox in a different way? And if you could just comment on whether you're shifting more of your spend nationally away from the local state advertising market.

Daniel Taylor

I think the way we think about our bad ban is in a very disciplined way, right? I mean it's not going to be my job to decide the precise channel mix, but we are very focused on delivering the right economic returns, the right paybacks. And as media costs change, of course, we have to keep reevaluating all of the assets that we have. But we see -- we still see good returns, albeit as we've acknowledged, the competitive intensity is materially higher. The costs, therefore, are under pressure in places. And it's putting some of the pressure on some of the share of voice metrics. So I think we need to be flexible and disciplined in how we deploy our Musement, but we're equally -- we've got an amazing asset in the foundry of random where we need to keep developing it.

Operator

Your next question is from the line of Dan Politzer from JPMorgan.

Daniel Politzer

I just wanted to go back to kind of how you're thinking about the sports growth in the U.S. If your NGR margins are going to be flat there. Obviously, you're more reliant on handle growth from here, which I think is driven by that elevated promotional level. So I guess -- the question is, how sustainable is this strategy? And maybe how differentiated is it, especially as we enter an environment which, as you guys have said, it's increasingly competitive.

Daniel Taylor

Yes, as we said, we're not specifically guiding on 2027. I think when you think about some of the building box for next year and how we're thinking about them. We've talked about the fact that we expect that and anticipate there to be an elevated marketing intensity. I think if you look at the combination of what's happening in the production market space and in core OSB at the moment, we think that's something that will continue into 2027. The generosity investment that we've made over the last quarter has worked very effectively for us. So that's not something, again, that we anticipate stepping away from as we move into next year.

As I said earlier, we need to see how the market develops into 2027 and the levels of market growth that we see. We're pretty confident that we're making the right steps in terms of product development, customer proposition, and we've really kind of moved forward in that space as well over the last quarter, which I think will stand us in good stead as we go into next year. And as I said, we'll come back in February our Q4s and talk about 2027 in more detail.

Operator

Your next question is from the line of Joseph from Susquehanna.

Joseph Stauff

On Dan. Rob, I was curious to see if you could share any more details on the retention and the engagement metrics of the very large cohort of new World Cup customer acquisitions you had, it was about $2.3 million. And if you could share in terms of the participation, what you've been able to convert, whether it be in football, U.S. football and/or basketball in October? .

Daniel Taylor

Yes. So the World Cup was about 6% of Q3 handle. And it was a big customer acquisition but as you said, we have 2.3 million customers on the World Cup. About 1/3 of those were reactivated. And we exited July with 600,000 more customers than we had in the previous 2 years. And we -- the retention was very strong. We saw MLB engagement through July and August, benefiting from that. I think that's helped us as we carry through into September, increasing player frequency. As I said, that's been up by 4%. -- bet count up 15% in the quarter, and this contributed to the strong start of the NFL season.

So we acquired a lot of customers in the World Cup. And I think that's put us in good stead as we -- as I said, started the NFL season.

Operator

Your next question is from the line of Jed Kelly from Oppenheimer & Co. Inc.

Jed Kelly

Just if we look at the overall combo volumes and then the sports volumes on prediction markets, and we kind of assume like low double-digit share it should imply your market-making revenue should be pretty well above the $50 million you're calling out. So can you just kind of talk about some of the puts and takes when we look at like the public volumes we can see how we should think about where you -- how you're competing against other market makers?

Daniel Taylor

Yes. I think with that got a math, Jed, we should get you on to the team and be helpful for the overall forecast. As I've said, we are very much confident in the forecast that we've got for this year. We're not coming out and saying that we're going to be materially better than that at this stage. I think some of the things as we look forward with market making that gives us a cause for optimism, as we said earlier, is the fact that we are linking up with more exchanges. And ultimately, we do feel we have a right to win in this space in terms of our expertise, our ability to price complex products and also ultimately with our liquidity when you see some of the request for prices on coming in.

So we're not upping the guidance for this year on market making. You'll recall as well, there are market maker fees to be paid as well. So there is a cost of sale associated with market making. We're confident in our guidance for this year, and we'll look to continue to improve that into 2027.

Operator

You next question is from the line of Ryan Sigdahl from Craig Hallum.

Ryan Sigdahl

Dan, -- how much of the increased competitive intensity do you think is a direct result of FanDuel, which you guys as a leader, everyone else has to work harder to compete against you guys. So it feels like this could just be a negative feedback loop of promos lower industry profitability and that ultimately driven by FanDuel. And then kind of second part of that, what gives you confidence, I guess, that you can ultimately wean players off of higher for longer generosity and ultimately, moving that win margins higher over the medium term after being flat for a period over the near term?

Daniel Taylor

I'll take that. So look, I think when the increase in density was communicated, to be clear, that was to bring FanDuel in line with the market, not ahead of the market. where we are today, we believe, is in line or slightly below the market. in aggregate, not ahead of the market. So this for us was about ensuring that we had the right firepower and then we will use science and smarts that we have to deploy that more effectively than anyone else can with the scale of our customer base.

So we're definitely not elevating the generosity here in the market. From a marketing spend perspective, the increase has predominantly been driven by the Predix operators. And that's a reality of where we are right now in the market with some of the uncertainties that we have. And that, as Bob has said, I think be a temporary position. We wouldn't expect that to be a level forever, but it is the nature of the market we're in today.

Thinking more broadly, if I look out, the levels of overall generosity spend are not unusual in an international context, albeit we would expect to see continued growth in the underlying gross margins. If I look around the world, the sort of mix of promotions that we have is not unusual at all. And we've got a lot of experience from how to optimize this from our businesses in Australia and the U.K. and Italy, where we've been doing this for many, many years. And the science between how you think about your pricing, your gross margins, your generosity 3 margins, there's a lot in that.

So I think we feel good about the long-term ability to drive overall net revenue, frankly, and net revenue margins, but we need to be flexible on the different levers that sit behind that to serve the customer in the right way.

Operator

Your next question comes from the line of Clark Lammin from U.S. Bank. BTIG.

Unknown Analyst

Dan. I wanted to see if you could elaborate on the comment in the shareholder letter around accelerating the U.S. product road map and innovation. -- guess that includes first-party prediction product, but I would be curious, I guess, for core Sportsbook and iGaming, where you see opportunities for innovation and improvement. Does some of the sportsbook growth that's been topical in Q&A thus far, hinge on further parlay penetration via new products and theoretical margin improvement maybe that's tied to product and for iGaming does product potentially allow you to manage greater competitive intensity right now. I would just be curious, I guess, what the playbook looks like.

Daniel Taylor

Look, it's a great question. Look, I think that on the product side, it's one of the things I've been really very impressed with the team on. So we -- the pace with which we are improving the product experience for customers now. I think it's the fastest that I've ever seen. -- or more of our code in family was being driven by AI. We're deploying at 6x the rate in terms of product development than we were 18 months ago and that's really picked up in the last quarter, I would say. So I'm feeling good about the pace of development. And we're privileged because we've got no shortage of ideas from around the group of how to serve our customers even better. During the period, we saw a step change in our cash-out availability.

We saw some poor improvements on things like market times. But we also saw some more differentiated features on the social side of things and how we allow customers to share bets on personalization. And we are leveraging Fanduel labs to test and iterate new ideas, and that's giving us whilst early days, powered by our sort of unique betting capabilities, different ways to create best for customers that we don't think anyone else can do. We'll continue iterating those with customers and see what lands well. But I'm excited to test and learn quickly there.

If I -- again, to the previous point on the previous question, really, I think that the -- we know that there is further upward scope for driving parlay penetration. We know that there is scope to drive frequency and back out and to deliver new products. This is -- in the U.S. is a -- by international standard, it's a young market. And there's lots of demand for our product that we've been and customer journeys and expenses that we haven't yet captured that we've seen from other parts of the world. So I'm excited about that for the team. And as I said, I'm really pleased and impressed with the way the product and tech teams are driving that innovation with the customer at increasing pace.

Operator

Your next question is from the line of Monique Pollard from Citigroup.

Monique Pollard

Dan, I just wanted to pick up on what you were mentioning around the ways in which you can think to promote, et cetera, and generosity and generosity through margin. So Rob, I think at the last set of results, you talked to promotional spend in the second half being about 6% of handle. I just wanted to understand how much of that was going to come via strain generosity and how much via a kind of odds boost pricing dynamic I was thinking particularly of the BET protect that you had in September that was given away for free.

And what the uptake is like when you do the straight promotions versus generosity versus the kind of pricing dynamics and how to think about that?

Daniel Taylor

Monique. Look, so I mean, we think about the overall bucket of Geneva team. I think there are ways that's reported in terms of different primes part in different ways. But that's not something that we split out of the way we think about it. We need to be flexible to deliver the right promo to the right customer at the right time. Sometimes those come through as we bet. Sometimes they come through its price boots, sometimes they come through it. injury protect or super sub. And we have all sorts of those in our army. I think the aggregate level of 6% is the right way to think about it. But we're not going to be tied and the team would be wrong, frankly, to try and tie the team to any particular way of distributing that rather than what works the customer at that point in time in the market.

And we're very, very dynamic and responsive -- these plans are constantly evolving. So yes, we think about it as 1 bucket and how to deliver the best experience to the customer. And that's the same way we do around the world. You have the same complexities when we think about super sub across the U.K. or across the Italian market or many of the promotions we've got in Australia, many of those run through gross margin some run through the free bets line. But I don't really focus on splitting those out, and I don't think we'd like for the team to do so.

Operator

Your next question is from the line of Chad Beynon from Macquarie.

Chad Beynon

I wanted to ask about, I guess, the mitigation -- or the UK iGaming mitigation journey thus far, kind of what you've learned. And as you think about how to navigate that business when sports betting implements the higher margin in 27 if you have different views versus original expectations based on your success thus far in iGaming.

Daniel Taylor

So look, I think as people were probably picked up, we've had to make some pretty challenging decisions in the U.K. in the context of tax rises, and we announced last week or the week before, about 1,400 departures from our U.K. and our business. And that's -- those are hard choices that the team have had to make. -- but we think they set us up to win in a post-tax environment. We really had 2 choices with the taxes going up. One was to cut marketing and cut generosity. And the other was to leverage our scale to allow us to protect the investments in the customer, and we've picked the second. So we're leaning into our scale advantage that's allowing us to reduce the fixed costs whilst protecting investments at a higher level on marketing, generosity, et cetera.

And we think that is underpinning the share gains we've seen, and we think it will underpin further share gains going forward. So I think that's sort of strategically something that I think is very important for us, not just in the U.K. but actually across flutter more broadly. We have unparalleled global scale. We have the ability, therefore, to drive more operational leverage than any other operator in this sector anywhere in the world. We haven't always taken full advantage of that for lots of good reasons. But that's available to us in a way that I don't think it's available to anybody else. And I think that positions us well to navigate these sorts of regulatory tax pressures better than others.

They will all be painful. And the choices in the U.K. were very paying for, but they're the right ones for the health of the business. and those set us up well. And I think that we're starting to see the results in that. And I have to say, credit to the leadership of that business because they've done an adorable job of dealing in that was a very challenging situation, positioning us for the long term.

Operator

Your next question is from the line of Paul Ruddy from Dave.

Paul Ruddy

Rob, it's actually a bit of a follow-on from that question and it's really about the growth paradigm in international. I think you referenced 5% to 10% annual revenue growth rate paradigm. Just thinking about 2027, like is that an appropriate level for 2027 from a revenue perspective? And just when we think about the puts and takes you've referenced very strong Italy pushed with some tax headwinds in the U.K. and Brazil coming out. Would you be able to give us a sense of kind of what level or what range of EBITDA growth we could expect next year if that 5% to 10% revenue growth paradigm is kind of appropriate for '27?

Daniel Taylor

Paul, it's Robert. Good question. And ultimately, for 2027, we are pretty confident about the ability to continue growing the EBITDA in our international business. and we'd expect to be at the higher end of the range that you quoted there of 5% to 10%. I think when you look at revenue due to some of the other factors that you mentioned, we'd expect that to be slightly lower. We've got a significant number of cost initiatives landing into 2027 that will obviously help with EBITDA delivery and also investing behind initiatives within the business.

So we've got a good level of confidence about the strength of the international business into next year, certain parts of the portfolio performing particularly strongly not talked to a huge amount about Italy today, but we're really, really pleased with the performance in our Italian business, and we continue to grow our market leadership there. So yes, overall, we'd expect to be at the high end of that range that you mentioned from an EBITDA perspective.

Operator

Your next question is from the line of Charlie Muir-Sands from BNP Parabas.

Charlie Muir-Sands

Dan, Rob, Given the context that you've talked about positively on international, perhaps more limited development in how you see profitability in the U.S. next year and you're focused on trying to delever the business as well. Have you got any early thoughts you can share on potential CapEx levels -- and also have you contemplated and set aside any consideration of potential operational disposal in order to accelerate bidding our balance sheet back into your target range?

Daniel Taylor

I'll let Rob take the CapEx and then I'll come back on the second.

Rob Coldrake

Yes. So we spoke about CapEx at Q2, Charlie, and how we brought the guidance down for this year. So we brought it down to 815 million. We're very confident that we'll hit that number, if not a number, slightly below. And then into 2027, we're focused on reducing that further. We're looking at CapEx across the business as part of the simplification measures that Dan's laid out and bringing that down over time. So you can expect to continue to see CapEx come down over [indiscernible].

And with regard to the portfolio, I think I'm a big believer in the scale that you need to win. And we have got an unrivaled global scale in our category. We will always take a disciplined look at any of the assets around the world. But right now, I think there's more opportunities to get more benefits from the scale that we have rather than going the other way.

Operator

We have reached the end of the Q&A session. I will now pass the call back to Dan and Rob.

Rob Coldrake

Thanks, everyone, and goodbye.

Operator

This concludes today's call. Thank you for attending. You may now disconnect.