February US Sports Betting Market Monitor: FanDuel and DraftKings approach OSB duopoly with 74% combined market share
FanDuel and DraftKings continue to dominate the US online sports betting market after their combined share of GGR reached 73.9% in Q4 2022.
That’s according to the latest edition of the US Sports Betting Market Monitor from Eilers & Krejcik Gaming (EKG).
EKG has laid out the progress of FanDuel and DraftKings – together with competitors BetMGM and Caesars – since Q1 2021, at which time the two front runners held GGR share of just over 30% and just over 20%, respectively.
In Q4 2022, those figures skyrocketed to a 46.9% share for FanDuel and a 27% share for DraftKings, as the brands’ grip on the market continues to strengthen.
EKG pointed out the increased market share at the companies has coincided with reductions in marketing spend from both BetMGM and Caesars.
Indeed, BetMGM management said in its Q4 2022 investor update that it was undertaking ongoing efforts to optimise its bonus spending by prioritising higher value customers over marginal players, and that the process would result in declines in its share of overall GGR.
Super Bowl impact
FanDuel and DraftKings both “came out ahead” in the Super Bowl, according to EKG, after avoiding paying out on some of their bigger same-game parlay liabilities “thanks to Mahomes going under his passing totals and the Chiefs winning the game.”
EKG added: “It would have been a very bad night indeed for books had the game ended 37-34 Eagles. That was the score of the ‘leaked’ script for the game and a very popular bet for the public at around 80/1.”
"This year, same-game parlays will make up between 15% and 20% of the overall money wagered online on the #SuperBowl, according to the research firm @EilersKrejcik Gaming" https://t.co/5rIUAysf5u
— Chris Grove (@OPReport) February 10, 2023
Other bookies did not fare so well on the game. Bet365 said publicly it was one of its worst ever Super Bowls as a result of boosted prices that hit and the large number of touchdown scorers.
BetMGM’s revenue from the game was closer to flat, but the operator still ended up ahead on the night, according to the report.
Decreasing promotional spend
US sports betting operators have discussed reducing their spend on promotions as a percentage of net gaming revenue.
Peaks across several states have seen operators spending as much as 300% of NGR on promotional efforts, while spending levels now seem to be rationalising in several states, with promo costs hovering closer to the level of 50% of NGR.
Peaks were driven by more promotionally active periods such as market launches, the start of the NFL season in Q3, and the Super Bowl and March Madness in Q1.
Best of the rest
Comparisons with the rest of the US online sports betting market paint a stark picture for smaller operators.
Of the 59 operational US OSB brands (as of December 2022), just seven hold a market share of more than 1% nationally.
After the four largest operators mentioned above, next in line is BetRivers, Barstool Sportsbook and PointsBet with just 2.2%, 1.8% and 1.7% market share, respectively.
The next five operators hold a combined share of around 1.6%, leaving just 0.8% market share divided between the remaining 47 operators on the list.
Based on 2022’s total GGR figures across the US, that means 47 separate brands are currently competing for their share of annual revenue totalling around $60.8m.
It is fair to assume that 2023 will likely see more operators exit the market.
EKG’s 79-page monthly report provides a digest of news and data points, including forecasts, for the emerging market for regulated sports betting in the United States. Please contact managing director Chris Krafcik for more information.