A new report on the outlook of the daily fantasy sports industry sees limited opportunity for growth, with both handle and revenue likely to stay flat over the next several years, barring a major change.
The lowdown on the DFS industry
The picture wasn’t rosy. The analysis presents a “base case” of about $3.3 billion in handle (or entry fees) in 2018. Revenue would likely clock in around 10 percent of that figure, or roughly $330 million.
Right now, DraftKings still holds a sizable lead over FanDuel in the DFS space, both in terms of handle and revenue. Both sites have been attempting to innovate in the last year in the hopes of sparking growth.
Change could be coming in 2018
Those projections, Eilers notes, do not account for potential pivotal moments for the DFS industry, such as a FanDuel sale or the legalization of sports betting in states around the US.
Both companies are hoping they will be able to benefit from the latter. The US Supreme Court case about New Jersey sports betting could strike down the federal ban on single-game wagering.
DraftKings has already publicly talked about its desire to move into the sports betting space. It’s all but certain FanDuel is likely looking for ways to get involved as well, with the right verdict from the Supreme Court.
Industry sources also tell Legal Sports Report that FanDuel has actively been trying to raise new funding. It has not completed a public round since 2015, although it has had infusions of cash via convertible notes. It’s also likely to seriously consider a sale this year.