After seeing a deluge of TV ads depicting DFS players winning million-dollar checks last year, many find it hard to believe that most, if not all daily fantasy operators are not profitable. But while they aren’t yet printing money for their investors, industry leaders FanDuel and DraftKings reportedly took in three times more entry fees in 2015 than they did the previous year.
Despite heavy pressure from lawmakers and regulators, the two sites managed to continue their explosive growth last year, with revenues approaching $3 billion. Both sites were locked in a battle to acquire new customers at the start of the 2015 NFL season, spending millions of dollars to keep their ads front and center on nearly all mediums.
To aid in their marketing efforts, DraftKings and FanDuel attempted to one-up each other by offering ever-increasing guaranteed prize pools. DraftKings was the top spender in that regard, many times dwarfing FanDuel’s contests with multimillion dollar first-place prizes.
But while DraftKings’ brute force approach to advertising may have made it seem to be the market leader, it actually booked nearly $600 million in revenue less than its closest competitor. Those figures come courtesy of a report by Eilers and Krejcik, an analytics firm specializing in the iGaming industry.
FanDuel claims the top spot
Lacking data from the actual operators themselves, analysts at the firm used proprietary techniques to try and unravel the finances of the two companies. What they found was that FanDuel remained the top dog in DFS in 2015, with nearly $1.8 billion in player entry fees; DraftKings came in close second, with $1.2 billion.
Eilers and Krejcik also estimated that FanDuel reaped around $174 million in revenue last year, with DraftKings banking $106 million.
“After just three years in business we had a very successful 2015, and expect continued progress in the coming year,’’ DraftKings spokeswoman Sabrina Macias told the Boston Globe. FanDuel for its part has highlighted its triple digit growth and claims to have surpassed 6 million registered users.
Of the $3.1 billion of fees reaped in total, $1.94 billion came from the top 10 US markets. California, which hastily passed a DFS bill recently, led the nation with $357 million in fees. New York, where Atty. Gen. Eric Schneiderman has vowed to shut down the industry, came in second with $267 million viagra 100 vidal.
The future of DFS
In their report, Eilers and Krejcik tried to predict the market’s worth many years down the road.
“The daily fantasy sports industry is at a crossroads,” said Krejcik and industry consultant Chris Grove. “This year will undoubtedly mark a year of change and transformation. We are witnessing a monumental shift from the status quo, which will impact the underlying market dynamics and competitive landscape.”
In the best case scenario, they believe that the industry could reach $14 billion in entry fees by 2020. If, on the other hand, top states bow out of the market, they predict that entry fees could hover around $2 billion to $4 billion a year.
While several Atty. Gen. have come down hard on DFS, lawmakers in more than 20 states have introduced DFS bills which would legalize or regulate the industry.