The gap between the top two daily fantasy sports operators — DraftKings and FanDuel — and the rest of the industry remains a stark one ahead of a planned merger.
That DraftKings and FanDuel are light years ahead of the rest of its competitors in the DFS space is neither a shock nor a new development.
But the numbers at smaller DFS operators points how big the gap is.
Yahoo and DFS
Yahoo is easily the biggest company trying to make in-roads in the DFS space this side of DraftKings and FanDuel. But metrics at Yahoo DFS are still orders of magnitude behind the big two.
Here is a sampling of the publicly viewable Sunday NFL contests — including both guaranteed prize pools (GPP) and non-guaranteed contests — observed by Legal Sports Report this season at Yahoo. (These figures are not provided nor confirmed by Yahoo.)
| Site | Week | Entry Fees | Prizes | Revenue |
|---|---|---|---|---|
| Yahoo | Week 14 (12/11) | $331,664.00 | $302,584.13 | $29,079.87 |
| Yahoo | Week 13 (12/4) | $492,316.20 | $446,191.33 | $46,124.87 |
| Yahoo | Week 12 (11/27) | $559,247.00 | $522,054.90 | $37,192.10 |
| Yahoo | Week 11 (11/20) | $455,461.00 | $422,795.00 | $32,666.00 |
| Yahoo | Week 10 (11/13) | $394,827.00 | $364,330.00 | $30,497.00 |
| Yahoo | Week 9 (11/6) | $352,777.50 | $324,174.30 | $28,603.20 |
| Yahoo | Week 8 (10/30) | $452,425.00 | $421,844.50 | $30,580.50 |
| Yahoo | Week 7 (10/23) | $678,420.00 | $671,729.50 | $6,690.00 |
| Yahoo | Week 6 (10/16) | $565,075.00 | $528,011.90 | $37,063.10 |
Of course, Yahoo gets benefits from the DFS product other than revenue — like engagement on its over-arching sports platform. It also spends very little in the way of marketing and customer acquisition.
But still, the fact remains that Yahoo is making less for an entire slate of NFL games than DK and FD do on many of their single contests.
Metrics from Fantasy Aces
Fantasy Aces recently put out its Q3 numbers, including this statement:
The Corporation has remained the number three site through the end of August for the MLB season, behind industry leaders DraftKings and FanDuel and in front of Yahoo amongst others.
As established above, being ahead of Yahoo — if that is indeed the case — is not exactly something to write home about at this point. Here are the numbers that FA reported for Q3:
- Gross Revenue of $454,689, 170% increase over Q3 2015
- Prize Payouts of $5,315,133, 169% increase over Q3 2015
When you consider the fact that DraftKings and FanDuel hand out far more than $5 million in prizes on any given Sunday in September, that again shows how big the gap is. Revenue for both DraftKings and FanDuel eclipses $2 million on most Sundays — just for NFL contests.
Fantasy Aces does stand to grow with the acquisition of Fantasy Feud’s user database. But that still leaves a long way to go before its anywhere near capturing meaningful marketshare.
Where does that leave everyone else in the DFS market?
Some see room for an operator in the second tier — one of the above sites or another like FantasyDraft, possibly — to assume a meaningful spot at No. 2 once DraftKings and FanDuel merge. (That’s assuming a review of the merger passes muster under anti-trust laws.)
That’s certainly possible. But also expect DraftKings and FanDuel to do whatever they can to stunt the ascendance of a new No. 2.
If we’re to believe DraftKings CEO Jason Robins, the two companies still haven’t figured out the logistics of the merge.
At least one scenario would have the two companies finding a way to share some liquidity while keeping two brands, which could help stunt the rise of a new No. 2.
Costs, time and effort associated with complying with state regulation of DFS remains a concern for sites with fewer resources, as well.
No matter what, the path for anyone to compete with DraftKings and FanDuel — merged or not — is a steep climb.
