Posted on: August 17, 2023, 04:43h.
Last updated on: August 17, 2023, 04:43h.
The US sports betting landscape is essentially a duopoly controlled by Flutter Entertainment’s (OTC: PDYPY) FanDuel and DraftKings (NASDAQ: DKNG) and it appears as though the latter is gaining market share.
In the second edition of Stifel’s Online Gambling Monthly Tracker, analyst Jeffrey Stantial that US online sports betting market share continues consolidating among FanDuel and DraftKings with latter recently notching small gains.
DraftKings has been the primary winner, with June data showing another step function in handle share (partially offset by unfavorable hold) reflecting the improved product-driven customer retention into MLB season,” wrote the analyst.
Flutter recently told investors that in the first six months of 2023, FanDuel had 47% share of the regulated internet sports betting market in the US. DraftKings is next on that list and those two operators control about 75% of the US market.
DraftKings, Others Making iGaming Gains
Sports wagering garners more headlines because it’s allowed in far more states than iGaming, but the latter is widely viewed as the more significant future growth driver of the gaming industry.
In that segment, there are signs of deconsolidation with operators such as Caesars, DraftKings and FanDuel pilfering some share from BetMGM.
“On the iCasino front, we’ve talked to recent deconsolidation trends in recent reports with DraftKings, FanDuel, and Caesars (to a lesser extent) taking share, primarily from BetMGM,” added Stantial. “This month, we highlight the first M/M increase in MI market share for BetMGM following seven consecutive months (~5%) of market share contraction.”
Specific to DraftKings, that company’s 2022 acquisition of Tilman Fertitta’s Golden Nugget Online Gaming (GNOG) positioned it for iGaming success. Today, the operator is a leader in several of the states in which GNOG was operational prior to the transaction.
Near-Term iGaming, OSB Items of Note
Stantial points to several iGaming and sports betting factors investors should watch over the near-term.
“1) the November launch of PENN’s ESPN Bet & associated marketing/promotional campaign, 2) Fanatics’ integration and rollout of the acquired Pointsbet platform, 3) the launch of a standalone Caesars iCasino app, 4) DraftKings’ rollout of in-house priced NFL live SGP this season, 5) BetMGM’s integration of Angstrom Sports and related improvements to parlay & in-play product, and 6) WynnBet and Fox Bet closures (collectively only LSD-MSD% market share),” concluded the analyst.
Fanatics launched its mobile sports betting yesterday in four states. For now, promotional spending in the industry is rational, but there are concerns that with the entry of Fanatics and the looming launch of ESPN Bet by Penn Entertainment, promotional spending could increase.
Stantial observed that increased spending could arrive, but it’s unlikely to mirror the levels seen in late 2021 and the first half of 2022 that spooked investors.
Todd Shriber
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