After DraftKings, FanDuel, No Second Tier in Online Sports Betting
It’s been widely noted that in the world of online sports betting, DraftKings (NASDAQ: DKNG) and FanDuel control 70% or more of the market, and while they don’t lack for competitors, some analysts believe there’s not a viable second tier of rivals in the industry.
The FanDuel Sportsbook logo. An analyst said there’s not a second tier of online sportsbook operators behind FanDuel and DraftKings. (Image: FanDuel Sportsbook)
DraftKings and FanDuel, a unit of Flutter Entertainment (NYSE: FLUT), fit the definition of a duopoly. But as Truist Securities analyst Barry Jonas observed in a new report to clients, the gap between those operators and rivals is so wide, that there isn’t a second tier.
Note that we skipped ‘tier two’ — we don’t think any operator in the space qualifies for that standing with white space between DKNG/FanDuel and others,” wrote the analyst.
Jonas noted that as of April, FanDuel and DraftKings combined to control 73% of online sports betting handle in the US, leaving a scant 27% for rivals such as BetMGM, Caesars Sportsbook, ESPN Bet, and Fanatics to vie for.
DraftKings, FanDuel Tech Cements Bettor Loyalty
In the early days of the online sports wagering boom, it appeared as though BetMGM would be a credible threat to DraftKings and FanDuel, and Caesars Sportsbook could at least lead the next group of contenders.
With some success, those operators wooed iGaming clients and sports bettors by tying those offerings to rewards programs typically used at land-based casinos. Executives from both operators have said they’ve seen evidence of customers accruing points online and redeeming them on dining, entertainment, and rooms at brick-and-mortar gaming venues.
DraftKings and FanDuel don’t possess such advantages, but both are among the most recognizable and valuable gaming brands due in large part to superior technology. Various reports and surveys confirm that much of bettors’ loyalty to an online sportsbook is fostered through ease of use and technology, areas in which DraftKings and FanDuel have made hefty investments.
Those investments have paid off. In a survey released in April, Truist noted that 45% of those queried said they prefer DraftKings or FanDuel for iGaming, and that’s critical because 62% of those polled said they prefer to bet on sports and play real-money online casino games through the same operator.
Can Tier 2 Form Behind DraftKings, FanDuel?
In discussing the prospects of a viable second tier emerging behind DraftKings and FanDuel, Jonas highlighted Penn Entertainment’s (NASDAQ: PENN) ESPN Bet as a possibility. However, the analyst acknowledged growth for that operator has been sluggish. That could be a sign that the 2024 football season will be pivotal for ESPN Bet’s fortunes.
Penn is making moves to bolster ESPN Bet, including the hiring of former Walt Disney (NYSE: DIS) executive Aaron LaBerge as chief technology officer (CTO). Fanatics, which Jonas said has a “differentiated strategy and product offering,” is making executive moves of its own, recently adding former Gucci executive Selena Kalvaria as chief marketing officer (CMO).
The analyst noted Caesars could firm its position in tier three while operators such as Bet365, Fanatics, and Rush Street Interactive (NYSE: RSI) could eventually climb the ranks.
The post After DraftKings, FanDuel, No Second Tier in Online Sports Betting appeared first on Casino.org.
Welcome to Billionaire Club Co LLC, your gateway to a brand-new social media experience! Sign up today and dive into over 10,000 fresh daily articles and videos curated just for your enjoyment. Enjoy the ad free experience, unlimited content interactions, and get that coveted blue check verification—all for just $1 a month!
Account Frozen
Your account is frozen. You can still view content but cannot interact with it.
Please go to your settings to update your account status.
Open Profile Settings