In a notable development within the online gambling sector, DraftKings has seized the top position in market share in the United States, displacing its longtime rival FanDuel, according to analysts. The Boston-based company has been on a consistent upward trajectory, particularly following its acquisition of Golden Nugget Online Gaming last year.
Data from Eilers & Krejcik Gaming reveals that DraftKings secured a 31% share of the online US gross gambling revenue in the third quarter, outpacing FanDuel at 30%. These statistics encompass both sports betting and online casino games. When the focus is narrowed to sports betting revenue exclusively, FanDuel maintains its lead with a 39.3% share over the past three months, while DraftKings closely follows with a 34.1% share.
DraftKings’ rise to the leading position in overall gaming revenue represents a turning point in the rapidly evolving US wagering market. The past few years have witnessed the growth of sports betting in the United States, an expansion that commenced in 2018 when a Supreme Court ruling allowed the practice to extend beyond the confines of Nevada.
Now, a total of 36 states have embraced sports betting, transforming it into a lucrative industry that has generated over $10 billion in revenue in the past year alone, as reported by market researcher Vixio.
Both FanDuel and DraftKings, pioneers in the fantasy sports space, strategically leveraged their extensive customer databases to venture into the world of sports wagering. FanDuel, which became part of the Irish bookmaker Flutter Entertainment in 2018, enjoyed an initial lead due to the backing of its parent company’s extensive experience in Europe.
FanDuel maintained its dominance by offering parlays, intricate bets involving multiple outcomes, which generated a higher revenue stream compared to traditional win-or-lose bets. The changing tide can be attributed to several factors. One critical factor is FanDuel’s gradual loss of its “first-mover advantage” in same-game parlays.
James Kilsby, Chief Analyst at Vixio Regulatory Intelligence, believes this played a pivotal role in FanDuel’s declining market share. Notably, several other operators, including DraftKings, have now also started offering similar bets.
Moreover, DraftKings managed to excel in the online casino business in New Jersey, one of the pioneering states in the adoption of online casino games and sports wagering. The report from Vixio indicates that DraftKings took the lead in New Jersey in August and managed to capture the top spot in its home state of Massachusetts.
The implications of this shift in the US online gambling market are profound, and more developments are taking place as the industry continues to evolve. New entrants, such as Fanatics and ESPN Bet, could pose significant competition for the DraftKings-FanDuel duopoly. Fanatics, in particular, could be a tough challenger as it integrates the assets it recently acquired from PointsBet.
Matt Kalish, one of the co-founders of DraftKings, recently expressed the company’s commitment to ongoing improvement as competition increases. He shared that DraftKings takes pride in its achievements but believes there is always more work to be done. “We enjoy the chart, but no one is anywhere close to satisfied yet at DraftKings,” said Kalish.
As DraftKings prepares to announce its next batch of financial results on November 2, the company’s stock performance reflects its growth, with an increase of over 144% this year. Much of this success can be attributed to its expanding market share and its ability to manage marketing and customer-acquisition costs.