FanDuel and DraftKings have continued to dominate the online sports betting marketplace in the U.S. in 2020, even as the COVID-19 global pandemic has created upheaval in countless industries.
According to a report issued last week by Vixio Gambling Compliance (the new “first name” was added in January as part of a rebranding), FanDuel held 40% of that market in the second quarter of 2020 in New Jersey, Pennsylvania, Indiana, Iowa, and West Virginia. That’s the same as the percentage from the fourth quarter of 2019 and one point higher than in the first three months of this year.
DraftKings has performed similarly, coming in at 35% and 34% in the first two quarters of the year. That’s well ahead of its 22% share in the third quarter of 2019.
A dizzying array of independent operators and casino brands comes out in the research as “Other” at 9% and 10% in the two quarters of 2020.
The power of Barstool
Is there an opportunity for any rival to cut into the FanDuel/DraftKings dominance?
Gambling Compliance’s James Kilsby sees one possibility, beginning this fall.
“We’ll be watching whether Penn National Gaming’s Barstool Sports can succeed in landing a glove on FanDuel and DraftKings where the likes of FOX Bet and BetMGM didn’t last football season,” Kilsby wrote.
“Like the fantasy sports duo, Barstool has a shortcut on customer acquisition through its existing brand loyalty among millions of potential sports bettors. Barstool’s launch — initially in Pennsylvania, it seems — will undoubtedly be the most intriguing of [the second half of 2020].”
Indeed, when Penn National announced in January that it was acquiring 36% of the company for $163 million, Barstool reported 66 million monthly unique visitors and 8.2 million unique monthly podcast listeners — topping sports industry behemoth ESPN’s tally of 6.9 million listeners.
As far as individual state markets go, Kilsby says, “We will be watching closely for whether the duo can maintain that level of dominance in Colorado, arguably the most competitive U.S. market to date — and one where various European and Nevada sportsbook operators are looking to lay down a marker.”
Assessing the U.S. sports betting market
Kilsby noted that Gambling Compliance’s prediction back in December of “five to 10” states legalizing sports betting this year so far has fallen short; only Washington and Virginia have done so.
“COVID-19 has halted legislative sessions and caused ripening policy discussions in various state capitals to be shelved,” Kilsby wrote.
Who’s next? Kilsby is looking to Ohio.
“Lawmakers in the Buckeye State will be in session through year-end, leaving enough time for the state Senate to pick up a bill already passed by the House in May and attempt to resolve policy tensions that include which agency should regulate sports wagering,” Kilsby said.
The emerging sports betting markets since mid-2018 — meaning all states except Nevada — were up 57% in the first half of 2020 compared to the same period in 2019.
Sports betting on the ballot
Mark down Nov. 3 as a key day for U.S. sports betting, Kilsby writes, as residents of Louisiana, Maryland, and South Dakota will have a chance to decide in statewide referendums whether to allow sports betting.
“Although all three states would still need to pass more specific implementing legislation should those ballots be successful, voter approval could unlock markets worth up to $571 million in combined annual revenue at maturity, according to our forecasts.
“After a Colorado referendum last November passed by a razor-thin margin, few will see any of the Class of 2020 as a sure bet — particularly in a presidential election year expected to see a high turnout of liberal voters.”
The estimated annual gross gaming revenue per state breaks down to $293 million in Maryland, $191 million in Louisiana, and $27 million in sparsely populated South Dakota.
Success in those states could cause legislators in larger states, such as California, Texas, New York, Florida, and Georgia, to take notice, he added.
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