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Editor’s note: This story was posted earlier but was edited and republished in its current form.
Daily fantasy sports — and FanDuel and DraftKings in particular — had quite a year in 2015. Of course, the tail end of the year was dominated by the NFL season and controversy over regulating the industry.
The overwhelming growth, though, should not be ignored.
SuperLobby.com, which tracks DFS analytics, shed some light in a report released this week on just how much money DFS generated last year.
“For a few moments we can take our minds off the legal battles, in-fighting between touts, horrific PR statements and simply sit back and ruminate over the sheer volume of dollars that have flowed through the DFS market,” said SuperLobby CEO David Copeland in the report.
SuperLobby’s data only has visibility into guaranteed prize pool contests; the full DFS market, according to LSR’s estimate, was $3.7 billion in entry fees for 2015. But SuperLobby’s numbers can be used to show the general distribution of entry fees paid across different sports:
Obviously there are simply more contests and greater frequency for both MLB and NBA. But the fact that other sports are catching up with football in terms of handle and revenue is a good sign for diversification of the DFS product. At FanDuel last year, the weekly revenue from NBA was noticeably catching up with NFL metrics.
The advertising campaigns dominated the airwaves early in the NFL season. So pervasive were FanDuel and DraftKings,that both sites became among the top television advertisers in the nation. And it might have brought some unwelcome attention, too.
— Yahoo Finance (@YahooFinance) January 18, 2016
In all DraftKings spent more than $150 million on television commercials last year, according to advertising tracking site iSpot.tv. And DraftKings is now rethinking its strategy for 2016, according to a story by the Boston Globe.
The ever-changing landscape today provides more questions than answers early in 2016.
The biggest question is, of course, what will the industry look like in the near future now that it is could soon come under the watchful eye of regulators? In addition, legal fees paid by the major DFS sites are tallying up, and that will continue to affect their business models.
RotoCurve’s Michael Rathburn added that it might be interesting to watch Yahoo, the distant No. 3 in DFS, to see if it can thrive under these uncertain regulatory conditions because it does not “rely solely on DFS.”
“I think we will see a lot of changes coming in the summer like always for DFS,” said Michael Rathburn, who did not offer any specific changes. “I have some ideas, but nothing concrete.”
With confirmation from SuperLobby, we know that DFS can generates billions in entry fees and hundreds of millions in revenue. But there is no guarantee that DFS can rake in the same amount in 2016.
After a tumultuous year in 2015, the industry heads into the year on uncertain footing.