Sports Betting: The Dominance of the Top Players
Prediction: The Profitable Ventures of FanDuel, DraftKings, and Fanatics in Sports Betting Pose Threats to Competitors
In the ever-evolving realm of sports betting, the fourth quarter of 2024 saw a slowdown in industry-wide growth. Yet, the market is booming favorably for two clear leaders, FanDuel and DraftKings.
Unstoppable at the Top
FanDuel and DraftKings have weathered the storm while many brands have faded since the 2020-2022 regulation gold rush. Although DraftKings trailed FanDuel since 2018, the gap has narrowed. In 2024, DraftKings even overtook Flutter-owned sportsbook, posing a significant challenge to FanDuel's crown. The unexpected contender, Fanatics Sportsbook, is rapidly rising, threatening BetMGM's position as the bridesmaid.
Job Cuts andmarket Shifts
BetMGM announced job cuts in January 2025 and Penn Entertainment is reportedly considering backing out of ESPN Bet, opening opportunities for other players like Fanatics. The political climate also changes, with the return of Donald Trump to power, bringing a pro-gambling, crypto-friendly administration and prediction markets as the new trend.
Tussle at the Top
DraftKings briefly dethroned FanDuel in Q3 2023, but returned to second place. In Q4 2024, DraftKings increased its share by 11%, climbing to a revenue of $1.39 billion, while FanDuel's share dropped by 68 basis points. Despite the narrowing gap, FanDuel's revenue for Q4 still outpaced DraftKings, showcasing the magnitude of their lead against other competitors.
Fanatics' Meteoric Rise
Fanatics Sportsbook, owned by Michael Rubin, has disrupted the market since its entry in late 2023. Originally a sports merchandise manufacturer and retailer, Fanatics made strategic acquisitions and partnerships, such as PointsBet's US assets, to enter the sports betting industry. Currently available in 23 states, Fanatics has 6.7% market share, posing a serious threat to Caesars (5.3%) and BetMGM (7.5%).
In this fiercely competitive landscape, smaller brands such as MaximBet, FuboTV, SI Sportsbook, 888 Holdings, and BetMGM may struggle to stay relevant. The dominance of FanDuel, DraftKings, and Fanatics appears to be unshakable, with 2025 predicted to bring more changes for the industry.
A new trend emerging is the rise of prediction or event market betting with platforms such as Robinhood, Kalshi, and Polymarket gaining attention. The potential market shift is further amplified by recent industry developments, such as the nomination of a Kalshi executive to head the Commodity Futures Trading Commission. FanDuel is closely monitoring these changes, while other market leaders reassess their strategies for the upcoming year.
Investors may be drawn to the sports-betting business, given the dominance of FanDuel, DraftKings, and the rising star Fanatics. These three companies control a large portion of the market, with FanDuel and DraftKings maintaining their leadership positions and Fanatics rapidly gaining ground. Moreover, the emergence of new trends such as prediction or event market betting presents both opportunities and challenges for these market leaders, as platforms like Robinhood, Kalshi, and Polymarket gain attention.
