Sports betting and fantasy sports companies expect to see substantial overlap in the Venn diagram of their customers. Daily fantasy sports, in particular, is sometimes perceived as a gateway to betting.
DraftKings and FanDuel certainly think that’s the case. The two DFS leaders are pivoting into full-scale wagering, banking on their existing customers to give them a strong entry point into the new US industry. It remains to be seen how many of their several million players will pivot along with them.
We don’t yet have a great case study in any existing market — DFS appeals to fewer customers in the UK and Australia, for example — but we do have some new data to support the suppositions in the US.
The Fantasy Sports Trade Association (FSTA) is currently holding its summer conference this week in Minneapolis, with sports betting as a focal point. Today, the group released the data from its study entitled “Understanding Crossover Between Fantasy Sports Players and Sports Bettors.”
In a survey of almost 1,500 customers, almost half of all fantasy players said they bet on sports — and vice versa. Nearly a third fall within the overlap as “crossover players” who participate in both industries.
Heavy crossover among sports speculators
The FSTA listed its objective like so:
The goal of this research was to uncover potential avenues where businesses within the fantasy sports industry could profit from the budding shift in the sports betting legislations across US states.
The group polled 1,484 US adults who had either played fantasy sports or bet on sports within the last year. The category of fantasy players included both daily and traditional, season-long customers.
Of the respondents, 980 play fantasy contests and 979 bet on sports. Almost exactly half of each group said they participate in the other activity, which means about a third do both.
- Exclusive fantasy sports players: 505 (34 percent)
- Exclusive sports bettors: 504 (34 percent)
- Crossover players: 475 (32 percent)
Results seem to show that the size of the two markets is pretty similar right now — with the caveat that sports betting was mostly illegal until last month. The FSTA conducted the online survey in early May, just prior to the US Supreme Court decision in the NJ sports betting case.
Digging into the data
The FSTA data includes a deep dive into the demographics and behavior of customers across both verticals.
One thing that sticks out: Crossover players tend to spend more money than those in the two individual groups. Take DFS, for example. A DFS-exclusive customer spends about $25 on an average entry (according to the survey), while those who also bet sports spend about $50 on an average entry.
Interestingly, the breakdown for fantasy sports customers is still weighted toward season-long players in 2018. They make up the majority of the respondents, and they demonstrate a slightly smaller appetite for conversion than their daily counterparts.
Some more highlights from the results:
- Crossover players are more likely to make parlay/teaser wagers than exclusive sports bettors.
- Crossover players tend to be more frequent players and bettors than exclusive customers in each vertical.
- Knowledge and interest in a particular sport were larger indicators of appetite than potential earnings across all groups.
- Sports bettors use more sites and subscription services than fantasy sports players.
- Sports bettors have a younger median age of entry (26 years old) than both traditional fantasy (29) and DFS players (32).
- Almost a quarter (22 percent) of sports bettors currently do so exclusively among friends, family and colleagues.
The data seems to bode well for the two industries as they continue to migrate toward each other.
What does it all mean?
DraftKings and FanDuel should be licking their chops over these results. Both have cleared their paths into sports betting, and if these numbers hold, about half of their existing customers will be interested in their new platforms.
FanDuel will be operating under new ownership as it makes the transition. Bookmaking giant Paddy Power Betfair moved to acquire the platform immediately after the SCOTUS ruling, and it intends to offer sports betting under the FanDuel brand this year.
DraftKings will be along for the ride shortly. Just announced today, the site is teaming up with Kambi to offer NJ sports betting under a land-based partnership with Resorts Atlantic City. Gaming officials are reviewing the DraftKings Sportsbook license as we speak, and Kambi says launch is “imminent.”
The market for US sports betting will eventually dwarf fantasy sports, and there’s some concern about the long-term viability of the latter. The study, however, seems to provide some reassurance that betting won’t be a death sentence for DFS. Expect fantasy traffic to tail off a bit, but gains on the sports betting side should more than compensate for any reduction.
It’s also good news for subscription strategy sites, affiliate sites, tout services, cheat sheets and the like. As the fantasy industry expands to include sports betting, expect current subscribers to demonstrate a growing interest in content across both verticals.
Those who should be a little concerned? Second-tier DFS sites with no public plans for sports betting, like Yahoo DFS.