DraftKings CEO Jason Robins told the Orange Country Register that he believes his daily fantasy sports site is No. 1, ahead of competitor FanDuel.
What Robins said, and is it true?
Robins comment was buried in a larger story that took a deeper look inside California-based Fantasy Aces, and detailed what went on at its live baseball final at Angels Stadium. But the most interesting nugget might have come as the story surveyed the DFS industry as a whole:
“I do think it’s tough sitting in FanDuel’s seat, when you got there first, and you watch DraftKings taking away market share, taking away market share, then just pass you.”
The comment isn’t terribly controversial, in reality. While there are arguments that FanDuel is still be No. 1 — and those arguments might grow with the start of NFL season — by most metrics that are publicly available, DraftKings has assumed the No. 1 position from FanDuel during the past two quarters of 2015.
His comment is mostly interesting in that FanDuel and DraftKings don’t usually talk much about each other via the media. There have been mentions in the past, but generally, direct comments by one member of the DFS duopoly about the other are few and far between. So a pretty aggressive statement from Robins is noteworthy, even if it’s accurate.
The argument for DraftKings seems pretty clear cut, right now
Legal Sports Report has twice considered the question of who is No. 1 in recent months (in June, and then again in August), coming to the same conclusion both times: DraftKings is No. 1, during this snapshot in time.
Of course, that has had much to do with DraftKings’ willingness to push into verticals that FanDuel so far has avoided (soccer, golf, MMA and NASCAR). FanDuel offered only baseball all summer.
Also consider:
- For the start of NFL season, DraftKings’ guaranteed contests far outpace FanDuel’s: $10 million for its top contest, vs. $5 million at FanDuel. Of course the key may lie in how well DraftKings fills this contest and all its major events, as well as how much cash-game traffic is generated.
- DraftKings has consistently sat atop Legal Sports Report’s Site Standings since it launched.
- DraftKings has also likely raised its brand awareness recently, spending heavily on advertising.
The DraftKings advertising push
The final point point above has been emphasized by television ad spending, which is tracked by the website ispot.tv. DraftKings, over the past week, is in the No. 4 position for all companies in spending — $15 million over seven days on television commercials.
DraftKings also leads all companies in the U.S. in terms of national airings of its commercials. As of Sunday afternoon:
And those figures come just as DraftKings is launching a round of ads with a new campaign, that is narrated by Edward Norton.
Will this big commitment to ad spend turn into new users and more money flowing into the site? Certainly some of that will occur. But will enough customer acquisition occur to justify the spend?
Everything still hinges on NFL season
All talk and the numbers from this summer aside, NFL season is where the rubber meets the road for DFS sites. A vast majority of the industry’s revenue will be generated over the next four months.
Eilers Research’s Adam Krejcik set the stage in a series of tweets:
Just about 2-wks away from start of NFL season and most important 3-months in FanDuel & DraftKings history. Some thoughts…(cont.)
— Adam Krejcik (@akrejcik) August 28, 2015
Will this be the NFL season that we see essentially no Overlay on either DK or FD? Wk1 will be telling & truthfully they cant afford much.
— Adam Krejcik (@akrejcik) August 28, 2015
Implied user costs have skyrocketed this year for DFS & in order to meet growth projection (& justify valuations), little room for error.
— Adam Krejcik (@akrejcik) August 28, 2015
So, while it’s nice to be No. 1 right now, being No. 1 after NFL season would be far more meaningful. At the same time, there’s definitely reason to believe DraftKings’ momentum can continue this fall.
