The newest analysis of the current and future status of the daily fantasy sports industry continues to paint an uncertain future, and one where fast-paced growth is likely off the table.
Eilers & Krejcik Gaming released its 2017 update on the DFS industry on Friday. The report (preview here, full report paywalled) gets into nearly every meaningful part of the industry — led by DraftKings and FanDuel — but here’s a sampling of its top-level takeaways:
2016 for DFS handle and revenue, and future forecasts
The Eilers report starts out by saying that it is “increasingly unlikely that DFS will reach some of the more bullish forecasts we laid out a few years ago.” That includes a report — from two years ago — where annual revenue could reach the billions. Eilers had already revised those projections backwards by early last year.
However, a variety of factors — including legal and regulatory challenges — have pumped the brakes on such growth forecasts. Eilers estimates the DFS industry grew slightly — by about 4 percent to more than $3.2 billion in handle — in 2016. Revenue, meanwhile, was up about 15 percent, year over year.
Here is a look at the possible trajectories for DFS in terms of handle, per Eilers:

The report includes more on how each “case” is realized.
A report last month came to a similar conclusion, forecasting $5 billion in worldwide annual handle by 2020.
DraftKings offered the following statement after the report was released:
“While still nascent, we are pleased to see additional affirmation that the fantasy sports industry continues to grow and evolve. DraftKings has some of the most engaged and passionate customers in the world and we are relentlessly focused on delivering them the best possible products and experiences.”
The merger of DraftKings and FanDuel
The forecasts for the industry, of course, depend greatly on the market leaders and their plan to merge at some point this year.
Eilers calls the tie-up a “clear net positive,” while going on to hypothsize what the new company might look like. That’s something even DraftKings CEO Jason Robins has said remains uncertain.
The merger is also undergoing scrutiny from the federal government on whether it would constitute a monopoly. Interestingly, while Eilers notes that it has no special expertise in anti-trust regulation, it offers the following caveat:
We also believe regulators will come to recognize that blocking the merger will likely result in one (if not both) companies failing, an outcome that realizes the worst of both worlds.
Moving away from emphasis on huge contests
The Eilers report notes that FanDuel and DraftKings are making some “changes in the underlying product offerings,” including but not limited to an increased focus on more social-style DFS contests. (Friends Mode at FanDuel, Leagues at DraftKings.)
Eilers also reports that the top DraftKings and FanDuel NFL contests were smaller in terms of guaranteed prizes, year over year, as the sites shifted away from emphasizing contests with huge first prizes:
Uncertainty reigns in DFS
Ultimately, there are still lots of unanswered questions that will affect the present and future of the DFS industry. Some of those factors:
- How the DK/FD merger will take place, and if regulators will approve it
- How states will legislate DFS in 2017 and beyond.
- If the industry find ways to grow in a meaningful way after the merger.
Still, the Eilers report, as a whole, indicates the foundation of the DFS industry is on more stable ground than it was a year ago. That paints the possibility of a future where it can grow and eventually become profitable.