Fitch Downgrades Flutter Outlook to Negative, Citing Leverage Risks

Fitch Ratings has revised Flutter Entertainment plc’s outlook to negative from stable while affirming the company’s long-term issuer default rating at BBB-. The ratings agency additionally affirmed Flutter’s senior secured debt at BBB.

The shift to a negative outlook stems from Fitch’s expectation that Flutter’s leverage will surpass its negative sensitivity threshold in 2026 and possibly again in 2027. Whether the breach occurs depends on the pace of margin recovery, especially in the United States, as well as the adverse impact of higher UK taxation during 2026 and 2027. Fitch assumes Flutter remains committed to its medium-term leverage target of 2.0x-2.5x.

Flutter introduced its FanDuel Predicts platform in the US during the fourth quarter of 2025 and has continued investing in prediction markets through 2026. The company expects these investments, along with online sports betting outlays, to lower adjusted EBITDA in 2026 by an amount at the upper end of the $200 million-to-$300 million range. Flutter’s second-quarter 2026 results were subdued, hurt by customer-friendly sports outcomes, heavy spending on US prediction markets, and World Cup 2026 marketing expenses.

Flutter has halted the $5 billion share repurchase programme it announced in September 2024, having executed only $250 million of buybacks in 2026 as management prioritises reducing leverage. The company repurchased $1.1 billion of shares in 2025. Fitch projects that share repurchases will stay limited in 2027 before climbing above $1.5 billion per year in 2028-2029.

At the close of the second quarter of 2026, Flutter held $1.5 billion in Fitch-adjusted readily available cash and had £0.8 billion still accessible under its £1.1 billion revolving credit facility. Fitch anticipates robust free cash flow generation across 2026-2028, with minimal mergers and acquisitions activity and buybacks contingent on operating performance.

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