A new gaming report pegs the online sports betting market share for DraftKings and FanDuel at 79 percent in New Jersey’s first quarter of 2019. Those legacy daily fantasy sports brands could soon gain a similar advantage in Tennessee and a lesser one in Iowa.
Eilers & Krejcik Gaming derived this figure using a proprietary tracking algorithm. Those two companies, best known for their DFS products, are capitalizing on name recognition and a head start on a database of likely users given the overlap between DFS and betting consumers.
Online sports betting in New Jersey accounted for about 77 percent of total revenue. Of that $24.3 million market, EKG attributed about 51 percent to FanDuel and 29 percent to DraftKings. FanDuel generated a state record $17.5 million in revenue in March. The report noted several more sportsbooks are likely to join the market, meaning New Jersey could have about 20 operational brands by the start of the NFL season in September. The Garden State currently has 13 sportsbooks.
SportTechie Takeaway
DraftKings and FanDuel are now eyeing the progress and timeline of legislation and implementation in Iowa closely. That state has a pending sports betting bill in front of the governor that would legalize betting and also DFS. To date, Iowa has been one of the few states not to allow DFS offerings, limiting the inherent advantage DraftKings and FanDuel are enjoying in other states. Whether or not DFS goes live before sports betting in that state could have a large impact on both companies’ future success there.
Tennessee, meanwhile, has also sent a sports betting bill to its governor. That expected legislation is unique in that it would create the first online-only market, albeit with heavy costs for operators: about $700,000 in annual licensing fees, a 25 percent effective tax, and a mandate for official league data. As EKG predicts in its report, DraftKings and FanDuel are estimated to claim 70-to-80 percent of the market owing to their established positions in the state. EKG expects a $229 million market when Tennessee reaches maturity, with only one or two operators able to turn a profit solely through sports betting.