DraftKings Gains Market Share in US Sports Betting

In the realm of US sports betting, a duopoly has solidified its position, with Flutter Entertainment's (OTC: PDYPY) FanDuel and DraftKings (NASDAQ: DKNG) leading the way. And it seems that DraftKings is making significant strides in this competitive arena.

DraftKings' Market Share

The second edition of Stifel's “Online Gambling Monthly Tracker” highlights ongoing market consolidation between FanDuel and DraftKings in the US online sports betting space. However, recently, it's DraftKings that has managed to secure slight gains in its market share.

Analyst Jeffrey Stantial emphasizes that DraftKings is emerging as the clear winner in this race. Data from June points to another upward shift in market share (partially offset by less favorable hold rates). This indicates an enhanced customer connection driven by product improvements during the MLB season.

Flutter recently disclosed that FanDuel commanded a 47% share of the regulated internet sports betting market in the first half of 2023. DraftKings follows closely behind on this list, and combined, these two giants oversee approximately 75% of the US market.

The Significance of iGaming

While sports betting enjoys legality in more states compared to iGaming, the latter is viewed as the driving force for the future growth of the gaming industry.

There's a noteworthy trend towards deconsolidation in this segment, with operators like Caesars, DraftKings, and FanDuel chipping away at BetMGM's market share.

“In terms of iCasino, recent reports indicate a trend of deconsolidation, with DraftKings, FanDuel, and to a lesser extent, Caesars, taking market share primarily from BetMGM,” Stantial adds. “This month, we're highlighting the first month-over-month increase in BetMGM's market share in Michigan, following seven consecutive months of decline.”

DraftKings' Triumph in the iGaming Arena

DraftKings' strategic acquisition of Tilman Fertitta's Golden Nugget Online Gaming (GNOG) in 2022 has positioned the company for success in the iGaming sector. Today, DraftKings leads the pack in several states where GNOG had established a presence before the acquisition.

Anticipated Developments to Watch

Stantial directs our attention to various factors that investors should keep an eye on in the coming months in the iGaming and sports betting sectors:

1. The launch of PENN's ESPN Bet and its associated marketing campaign in November.
2. Fanatics' integration and rollout of the acquired Pointsbet platform.
3. The introduction of a dedicated Caesars iCasino app.
4. DraftKings' introduction of in-house priced NFL live single-game parlays (SGP) this season.
5. BetMGM's integration of Angstrom Sports, leading to enhancements in the parlay and in-play offerings.
6. The closure of WynnBet and Fox Bet, which will collectively impact market share minimally.

Fanatics recently introduced its mobile sports betting app in four states. Currently, promotional spending in the industry is reasonable. However, concerns are brewing that with Fanatics' entry and the impending launch of ESPN Bet by Penn Entertainment, promotional expenses might surge.

Stantial acknowledges that increased spending is a possibility, but it's unlikely to reach the levels that caused investor apprehension in late 2021 and the first half of 2022.

In Conclusion

In the dynamic landscape of US sports betting, companies like DraftKings are anything but idle. The competition between major players FanDuel and DraftKings fosters constant innovation and evolution. With an increasing focus on iGaming and a flurry of impending developments, the future remains intriguing for these entities and the industry as a whole.

FAQs:

What is Stifel's “Online Gambling Monthly Tracker”?

Stifel's “Online Gambling Monthly Tracker” is a report that regularly analyzes the online gambling market, particularly focusing on sports betting and iGaming, while tracking significant trends and developments.

Why is iGaming significant for the gaming industry?

iGaming is regarded as the key future growth driver for the gaming industry, owing to its substantial revenue and market share potential despite limited legalization across states.

Which companies compete with DraftKings in the iGaming sector?

Companies like Caesars and FanDuel are also active in the iGaming sector and have gained market share from BetMGM.

What are the major upcoming developments in the sports betting market?

Several noteworthy events should be monitored by investors, including the launch of ESPN Bet and the integration of Fanatics' platform.

Could promotional spending in the industry increase?

While promotional expenses might rise, they are unlikely to reach the high levels observed in late 2021 and the first half of 2022, which caused concerns among investors.