Analysis: Alternative Data Illuminates Who, Where Of US Online Gambling Spend

In any given month, hundreds of millions of dollars flow through the financial institutions that facilitate legal online gambling in the US.

Online sports betting alone generated $11 billion in operator revenue from $120 billion in wagers last year, with online casinos adding another $7 billion to the industry’s bottom line. Just about every dollar can be accounted for through official agency reporting.

Consumer-level data is extremely limited, however, with most states not reporting the number of customers or individual wagers that contribute to the monthly totals. This lack of granular data paints a fuzzy picture of the origins of this money.

Alternative data is a useful tool for unraveling these types of problems, and a consumer spending panel compiled by Facteus helps shed light on the specifics of online gambling spend. The data set includes incoming bank transactions for four of the largest US online operators — BetMGM, DraftKings, FanDuel, and PrizePicks — covering the period from January 2022 through the end of this past March.

(Methodology is available at the bottom of this article.)

No surprise: FanDuel dominates online gambling spend

The dominance of FanDuel is evident across the entire data set.

The national leader generates the highest monthly spend from the largest customer base, responsible for about half of the totals in every category. Over the past 12 months, FanDuel accounted for 50% of the total spend, from 49% of all customers included in the report.

DraftKings trails in second place, having lost considerable ground to FanDuel in recent months. It generated 25% of the reported spend from a 25% share of the customer pool across the same period, and both of those numbers are trending slightly downward.

BetMGM, the country’s third-largest online gambling brand, is farther off the pace. It accounted for 18% of the spend from 13% of the customers in the report. That is a silver lining, with the highest average spend among these brands.

Visualizing pole position in the market

These numbers generally mirror US sports betting revenue reports and data from other forms of online gambling published through official channels at the state level.

Generation, geographic gap in online gambling

Demographics are an especially insightful inclusion in the Facteus data, since age information is not part of any official reporting. Numbers are grouped into four generational buckets with these approximate age ranges:

• Gen Z: <28
• Millennial: 28-43
• Gen X: 44-59
• Baby Boomer: 60+

Context clues suggest Millennials are the key demographic for online gaming operators, and the data from Facteus helps put some hard numbers to that notion.

Drilling into demographics of US online gambling spend

Millennials are by far the largest segment of online gamblers, in fact, and the most significant contributor for each of the four operators individually. The group represented 59% of all customers and 61% of the total spend recorded during the past year to lead both categories.

Millennial participation is volatile, though, collectively exhibiting the largest seasonal swings in activity of any age group.

Perhaps the most eye-opening revelation from the data centers on the disparity in scale between the youngest and oldest age groups. Over the past year, the monthly count of Gen Z customers in the data set averaged 57,348 compared to 4,809 Baby Boomers. The latter outspent their younger counterparts on average, however: $336 to $268 per month across that span.

Gen X, the third-largest group of customers, produced the highest monthly average spend of $360 apiece across all operators.

PrizePicks skews younger, with less spend

Numbers for PrizePicks are unique within the data set. Whether its product is more like sports betting or more like fantasy sports depends on your perspective, and it is the subject of ongoing disagreement between operators and policymakers.

Whatever the label, the format is exceedingly popular with young customers. Gen Z represents 37% of PrizePicks’ player base, almost twice the field average of 20%. PrizePicks regularly outdraws BetMGM across both of the two youngest generations, even overtaking DraftKings among the Gen Z segment for the last four months running.

Overall, PrizePicks accounted for 13% of the total customers and 6.5% of the recorded spend over the past year.

Regional data paints PrizePicks as an outlier too

Perhaps most pertinent to the larger discussion is PrizePicks’ heavy reliance on the South, with a particular focus on Florida and Texas. Look at the geography of its operation compared to the competition:

Florida recently ordered PrizePicks to stop offering against-the-house contests to local customers, a move which could have a significant impact on its overall performance going forward.

Geographical breakdowns for the other brands, meanwhile, reflect the map of legalization for sports betting and US online casino gambling more directly. All three rely on the densely regulated Midwest and Northeast, with their sports products complemented by online casinos in Michigan, Pennsylvania, New Jersey, and Connecticut.

The West remains relatively untapped, and the absence of California from the regulated marketplace is especially evident in the chart above. Fantasy sports (including PrizePicks) and horse betting remain the only forms of online gambling permitted in the state.

About Facteus data set

Spending panels fall into the category of ‘alternative data’ alongside measures like app usage statistics, social media analytics, location tracking, satellite imagery, and other information gleaned from secondary sources. Alternative data allows gambling analysts and investors to fill in some of the gaps in the ‘primary data’ that originates with the operators and regulators themselves.

Panels from Facteus capture all banking transactions for the four operators, so totals include sports betting, online casino, fantasy sports, and horse betting products as relevant to each. While the financial data is well-correlated with official reporting, these numbers should be viewed as comparative directional indicators rather than measurements of absolute performance.

For the most recent month of data in March 2024, the report includes more than $115 million in associated transactions from about 355,000 customers nationwide.