FanDuel seemingly survived another summertime showdown with its longtime rival and closest threat, DraftKings.
The US sports betting leader briefly fell back into second place this summer but retook the top spot as the fall betting calendar continued to thicken.
Following some encouraging developments in the first part of the year, DraftKings again returns to the second step after another impressive summer.
DraftKings tries on sports betting crown
Stripping away competing brands and charting head-to-head volume across common states helps visualize how the battle between DraftKings and FanDuel is playing out over time. The tug of war is fascinating, with DraftKings’ performance pivoting around a September peak in each of the previous two years.
The predictable way control shifts with the seasons provides an important backdrop for this conversation. It was hardly a surprise to see DraftKings pulling at the rope during summer 2023. It tends to be strong across this timeframe, thanks in large part to heavy marketing efforts during the approach to NFL betting season.
There were, however, some indications that things might be shaping up a little differently for this lap around the calendar. DraftKings began closing the gap to the leader especially early in 2023, and its late-summer peak was noticeably taller than it was in 2022.
Frenetic battle for New York
New York is one of only two markets that reports data on a weekly basis, and it was a canary in the coal mine throughout the summer months.
DraftKings’ share of head-to-head NY sports betting handle spiked to 56% for the week ending June 11, suddenly topping FanDuel’s 44% by some margin. It was the first time since launch that DraftKings outperformed FanDuel over the span of a single week, and it marked the start of a chaotic back-and-forth battle that raged all summer.
Overall, DraftKings won June in New York, 54%-46%. The score had been reversed in FanDuel’s favor a month prior and was even more lopsided before that. While DraftKings did slip back into second place for July, it clawed back to the top once again for August and September.
Considering the market accounts for close to 20% of the country’s total online betting volume, a big shift in New York can be enough to swing the national race by itself.
More states in play for DraftKings
DraftKings is already the established leader in some states like Iowa and Kansas, and it is within striking distance in a couple more.
Indiana seems to be swinging back toward its column, for example, with DraftKings overall share of that crowded market rising above 40% for five of the last six months. FanDuel’s combined share over the same period was just under 34%.
Illinois and Connecticut, meanwhile, are too close to call, with the top two brands regularly trading places in both. The most recent reports showed DraftKings +4.7% in Illinois (September) and +7.2% in Connecticut (October). Like New York, Illinois has the population to be a significant factor in the national picture.
Although Arizona historically falls under FanDuel’s control, DraftKings did manage to out-handle its rival on the last two reports (August and September) for the first time since November 2022.
DK shows out in new markets
Young Ohio sports betting is also in flux, with FanDuel so far failing to establish the kind of early lead it grew accustomed to in other new markets. DraftKings spent the first half of the year whittling away its small deficit, ultimately overtaking FanDuel for all each month of the third quarter. Its lead topped out at 8% on the heels of another strong September.
DraftKings will be almost impossible to beat on its own turf in Massachusetts too. The home favorite generated more than half of the state’s total betting volume since launch in March, some 20 points ahead of FanDuel and growing. The most recent numbers for Massachusetts sports betting show DraftKings +27% for October and +23% on the year.
Kentucky, the duo’s newest shared market, is still neck-and-neck through the first two months of reported operations.
FanDuel reclaims the throne
DraftKings’ summer push put it back in the overall lead for four straight months, including a 22-month high across these common markets in September. Incoming October and November reports are, however, breaking heavily in FanDuel’s direction so far.
FanDuel’s head-to-head lead in New York leapt back into double digits for the last two months, moving more in line with the lifetime average. Ohio saw a course correction too; the leaders played to a dead draw at 35.86% of handle apiece for the month. FanDuel is likely back ahead for the November report, and it remains the longstanding leader by some margin in Maryland, Michigan, and Pennsylvania too.
Across this group of states, FanDuel still generated a leading 37% of online handle through the first nine months of the year, albeit with a slight downward tilt. DraftKings’ share was 35% across the same period but conversely inching upward. History and early winter reporting suggests that gap will open back up in FanDuel’s favor over the coming months.
As was the case in 2021 and 2022, it looks like FanDuel fended off this charge in 2023.
FanDuel still dominating revenue battle
Handle is a useful metric for analyzing the comparative performance of brands since it provides a steadier picture of directional trends than the more-volatile revenue. For operators, though, revenue is all that matters at the end of the day.
FanDuel is still well out in front by that measurement, producing a total of $2.24 billion in gross revenue from that group of shared states during the first three quarters of 2023. DraftKings generated almost as much volume — $17.5 billion versus $18.5 billion — but grossed a comparatively leaner $1.55 billion across the same period.
FanDuel’s superior margins drove it to become the first major US sports betting brand to achieve profitability on the bottom line. Parent company Flutter expects the US segment to be revenue-positive for the current calendar year, bolstered by a 20% increase in customers from the recent launches and a gaudy 12.1% hold to date.
For their part, DraftKings investors seem content with its trajectory toward a profitable 2024 in the current climate. Shares of $DKNG are trading around $36 this week, up more than 200% since the start of the year.
