FanDuel recently announced they ended the quarter with a 51% sports betting market share by net revenue, besting rival DraftKings as the most profitable US sportsbook in the domestic market.
Profit King
Despite coming in second in the iGaming race, FanDuel was able to crow about their top ranking in terms of the sports betting revenue race to the top. According to FanDuel’s revenue reports, the UK bookmaker accounted for 51% of the market share by net revenue and 43% by gross revenue.
“In the U.S., FanDuel consolidated its sports leadership position during the peak quarter for sporting activity, while FanDuel Casino went from strength to strength,” said Flutter CEO Peter Jackson in a statement.
Although the final three months of the year showed FanDuel’s revenue coming up $343 million shy of projections, its quarterly revenue was $1.42 billion.
“While sports results were very customer friendly, particularly on the NFL in November, the underlying momentum in the business remains very strong heading into 2024,” Jackson added.
Formidable Foe
The emergence of ESPN BET into the marketplace has not escaped the concern of competitors in the mobile sports betting market, and FanDuel is no exception.
“They’re certainly going to be a formidable competitor, as well as a bunch of other people,” Jackson said of ESPN BET back in November when Penn Entertainment inked a 10-year-pact with the sports media broadcasting giant to use its name and platforms.
And while ESPN BET has put a dent in the market share of its rivals and overtaken many of the other players in the industry, FanDuel and DraftKings still remain the nation’s sports betting duopoly despite the arrival of the new kid on the block.
Business Still Booming
FanDuel has also been pleased with its ability to acquire new customers at a much higher and more financially palatable rate.
“This profit profile provides us with a clear platform to invest materially in the second half, as we strive to continuously improve our customer offering,” Jackson said in a published statement. “Our player acquisition strategy has consistently delivered, generating excellent returns on investment, embedding even greater value into our customer base, and increasing our future profitability.”
Big Expectations
As for ESPN BET’s short-term aspirations, Penn Entertainment has set a target of 20% market share by 2027, which is a lofty goal indeed considering their former brand, Barstool Sportsbook, only acquired roughly 5% of the market share.
Eilers & Krejcik analysts found those projections unreasonable and wrote, “U.S. OSB has not been kind to the media model and it takes a leap of faith to see ESPN BET as a long-term product leader. We can however see the case for a 5-10% market share by 2027 given a solid product and the ESPN brand.”
Nevertheless, the power of the brand, in this case, ESPN, proves just how valuable a name is and what it represents. Penn Entertainment had just finished paying $550 million for the Barstool brand name before the opportunity with ESPN presented itself.
As part of the $1.5 billion, 10-year deal, Penn was forced to divest itself of all things Barstool as ESPN did not want its brand conflated with the controversial Barstool name, and its founder, Dave Portnoy.
Ultimately, Penn Entertainment sold the Barstool brand and its media empire, sans the defunct sportsbook, back to Portnoy for $1 with the promise it would receive 50% of the profits should Barstool be sold at a later date.
