FanDuel Strengthens Its Position in the Betting Race with Strategic Decisions
Date: 2024-08-20 Author: Alex Crawford Categories: SPORTS BETTING
Amid the growing popularity of sports betting in the United States, two leading companies — DraftKings and Flutter Entertainment’s FanDuel — continue to dominate the sector. Experts note that the sports betting market is currently in a state of duopoly, with the two operators holding between 70% and 80% of the market share. However, changes in their strategies can affect the market share of each company, giving one or the other an advantage at times.
A recent report from analysts at Eilers & Krejcik Gaming (EKG) showed that DraftKings led in the first quarter of this year, but in the second quarter, the advantage shifted to FanDuel. According to data provided by Casino.org, FanDuel's average revenue per monthly active user (ARPMAU) was $134 in Q1, compared to $137 for DraftKings. This shift in FanDuel's favor in Q2 was attributed to the improvement of FanDuel's Major League Baseball (MLB) betting product. The analysts also noted a "relative shift in the player base from daily fantasy sports to casino," where the number of unique monthly players increased by 30%.
As for DraftKings, experts suggested that the company's results may have been adjusted due to the inclusion of Jackpocket customers in the calculation of unique monthly users. However, EKG's forecasts indicate that FanDuel will continue to strengthen its position in the U.S. market thanks to smart strategic decisions.
FanDuel is on the right track by rejecting DraftKings' surcharge idea
In early August, DraftKings announced plans to introduce a surcharge to offset expenses in high-tax states. The surcharge was set to affect bettors' winnings in several states, but the company claimed that the impact on customers would be negligible.
After the announcement, which drew criticism from bettors and sports fans, FanDuel decided not to support DraftKings' idea. DraftKings soon reversed its stance, saying that it had "listened to its customers" and decided not to implement the surcharge.
EKG analysts acknowledged that FanDuel's decision was a "wise move" because it allowed the company to avoid potential customer discontent and, more importantly, backlash from legislators who could view the surcharge as an attempt to evade taxes. FanDuel's decision not only forced DraftKings to abandon its idea, but also had an impact on the entire market, since if the two leading sportsbooks had implemented the surcharge, other operators would likely have followed suit. However, this does not mean that a possible surcharge would not cause controversy among consumers, since they would be the ones to bear the additional costs incurred by operators.
