The leadership in the US online sports betting market often changes and differs by state, but it’s clear that DraftKings and FanDuel have established themselves as the top two players.
Flutter’s second-quarter earnings report showed that FanDuel is well-positioned to maintain and grow its strong presence in the US sports betting market. This is supported by positive trends in average revenue per monthly active user (ARPMAU). In the first quarter, FanDuel’s ARPMAU was slightly lower than DraftKings, but by the second quarter, FanDuel had gained the upper hand.
This shift is likely due to improvements in FanDuel’s MLB parlay offerings and a movement of players from daily fantasy sports to casino games, where unique monthly players increased by 30%. On the other hand, DraftKings’ decline may be linked to the inclusion of Jackpocket customers in its calculations.
Enhancements to parlay options are particularly important as the 2024 football season approaches, with studies suggesting that NFL bettors plan to bet more frequently this year. Parlays have always been a key tool for increasing betting activity, especially during football season.
Long-Term Focus Can Benefit FanDuel
FanDuel has an edge over competitors like DraftKings because it’s part of a larger, more established company. While others are chasing short-term profits to impress analysts and investors, FanDuel can focus on long-term goals.
This long-term approach is appealing to institutional investors in the US, many of whom quickly bought shares of Flutter when the company listed on the New York Stock Exchange earlier this year.
Thanks to strong backing from its parent company and effective management, FanDuel has been profitable for a while. It uses its earnings to reinvest in areas like customer acquisition and technology.
“FanDuel mentioned that payment costs rose to about 6% of net gaming revenue (NGR) because of a faster deposit/withdrawal system, which led to more frequent transactions,” noted EKG. “While this costs FanDuel money, it’s worth it because customers love the feature, according to CFO Rob Coldrake. This kind of focus on the product has helped FanDuel achieve five consecutive No. 1 rankings in our online sports betting app testing.”
FanDuel Smart To Avoid Surcharge
Unlike DraftKings, FanDuel chose not to impose a surcharge on winning sports bets in states with high taxes. When FanDuel didn’t follow suit, DraftKings had to backtrack on the controversial surcharge.
Even though DraftKings dropped the surcharge plan, FanDuel and other rivals who avoided it may have already won favor with the public and policymakers.
“FanDuel’s decision likely helped avoid backlash from customers and, more importantly, from policymakers, who might not have approved of any attempts to sidestep taxes,” concluded EKG.