Why FanDuel, DraftKings Still Dominate Sports Betting Market Share In United States

There is a clear hierarchy in the U.S. sports betting industry. The four sportsbooks that hold the most market share are FanDuel Sportsbook, DraftKings Sportsbook, BetMGM, and Caesars Sportsbook. Other operators, even ones with media giants like FOX and ESPN, have not managed to gain enough market share to disrupt the top sportsbooks.

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How did these operators manage to secure their spots as the leaders in U.S. sports betting? Additionally, why have other operators been unable to pass them in the rankings? Let’s examine the industry and try to piece together what has shaped it.

Sportsbook Market Share Examined

According to Eilers & Krejcik Gaming (EKG), a boutique research and consulting firm, FanDuel and DraftKings make up the majority of the online sports betting and online casino industry. Combined, the two operators hold 67% market share. The only other operators that have managed to gather a significant piece of the market have been BetMGM and Caesars Sportsbook.

US Sportsbook Gross Gaming Revenue Market Share

Early Bird Gets The Worm

What works in favor of FanDuel and DraftKings is that they had a bit of a head start in the industry. It is likely that their established Daily Fantasy Sports brands, being popular before the repeal of PASPA, set up both companies to dominate the sports betting industry as well.

PASPA was repealed in 2018, allowing all states to choose whether they want to regulate sports betting or not. During that time, FanDuel and DraftKings were the top DFS apps. According to the 2018 annual report for Flutter Entertainment, FanDuel’s parent company, FanDuel already had more than eight million registered customers.

This was FanDuel’s customer base the same year they went live in New Jersey for sports betting. FanDuel Sportsbook is now live in 22 markets and has seen market growth every year since PASPA’s repeal.

DraftKings held a customer base of nearly eight million in July 2017, over a year before sports betting launched stateside. DK is now live in 24 states. With millions of customers already comfortable with FanDuel and DraftKings, it is clear that they had an edge in entering the betting industry by converting DFS users to sportsbook users.

Caesars And MGM: legacy Betting brands

What helped separate Caesars Sportsbook and BetMGM was that they had already established gambling brands. The MGM Grand and Caesars Palace in Las Vegas were already home to popular casinos well before PASPA’s repeal. While slots and table game revenue dwarfs retail sports betting in Nevada, these companies already had a database of people who have stayed at their properties to convert to their online sportsbook products.

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When online betting became the norm, it made sense that two dominant Las Vegas brands would join in on the mobile side of things. Caesars acquired British bookmaker William Hill for $2.9 billion, one of the largest gambling industry mergers in recent years.

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The brand recognition and early moves are what helped establish these companies in the online market.

Sportsbooks Who Have Failed To Gain Significant Market Share

Established sports media companies like Barstool, FOX Sports, and Sports Illustrated attempted to make a mark in the industry. From a branding perspective, it made perfect sense. These brands were associated with the sports world and believed they could leverage this into dominating the betting world as well. However, each of these operators failed to do so.

FOX Bet shuttered its operation in 2023. FanDuel parent company, Flutter, was also the parent company of FOX Bet. In 2022, Flutter suffered a $313 million U.S. loss. FOX Bet and another iGaming brand in PokerStars contributed $91 million of that loss. FOX Bet never held a major market share in any of the four markets it was live in.

Barstool Sportsbook failed to convert enough of its Barstool users to sports betting to carve out a significant market share. Barstool CEO Dave Portnoy was viewed unfavorably by regulators in his home state of Massachusetts, which caused concerns when parent company Penn Entertainment worked to gain market access. Even in markets where Barstool Sportsbook was live, it never dominated. Penn eventually sold Barstool back to Dave Portnoy for $1 and replaced the brand with ESPN BET.

SI Sportsbook was backed by 888 Holdings and will shutter its operations by the end of FY 2025. 888 CEO Per Widerström released a statement admitting that “achieving sufficient scale in the U.S. market to generate positive returns within an accelerated time frame is unlikely.”

Each of these established sports brands failed to garner much market share and has either closed or is closing its operations. It is clear that entering the sports betting industry without having a customer base established beforehand is a difficult task.

Do ESPN Bet And Fanatics Sportsbook Stand A Chance?

Currently, both ESPN Bet and Fanatics Sportsbook have established sports brands in media and apparel, respectively. Both are attempting to gain market share in the betting industry. Thus far, the process has been slow for both brands.

Penn Entertainment was vying to hold a 20% market share in the sports betting industry with ESPN Bet by 2027. However, the current trajectory of ESPN BET shows that they are not on track to achieve that goal. As of April 2024, ESPN Bet held just under 6% market share in sports betting.

Fanatics Sportsbook holds a 2.9% market share as of April 2024. While this did double Fanatics' market share since the second half of 2023, according to EKG, it is still a far cry from the brand dominance of FanDuel or DraftKings.

The early market share grab of the big sportsbooks gave them an edge in the market. Thus far, no other sportsbook has managed to crack it.

It is unlikely that any new sports betting brand can claim significant market share in the industry.