Chris Altruda

Morning peeps... here is something for y'all to look at. Based on some conversations with buyside accounts, there seems to be way more concern around operators' structural hold targets + variance of results, rather then competitive threat from prediction markets. In English that means, for example, Flutter has said (and reaffirmed as recently as 3Q25 results) they are targeting a long-term structural hold of 16% for FanDuel.... but folks might be getting a little skeptical about those levels based on recent outcome volatility. So what does this look like in a picture? Will keep using FanDuel because they give us the ingredients to illustrate. The red line depicts structural hold for past quarters... and is basically a theoretical construct (based on pricing, mix, seasonality, and models). The importance of it is that, as noted above, they are targeting 16% in the long-run. Next, the dark blue line is where they actually ended up for the periods, taking into account favorable/unfavorble outcomes. And lastly, the light blue line is net revenue margin they report, which is basically how much hits their topline once they take out all the promos... said differently: that is what pays the bills. Big takeaway: when you discuss hold percentages just be sure you are consistent and referring to the correct one. And of course... focus on what keeps the lights on! Also, when I was in the business 20 years ago, if we held 4-5% it was a good day, week, month, etc. And because we didn't run promos in a credit book, gross and net hold% would be equal... another reason why net-revenue margin is more meaningful, imo.