Ask any sports bettor which bookkeeper they prefer; chances are you’ll mostly hear FanDuel or DraftKings. The two brands have been duking it out for market leadership, and this time, one winner comes on top: DraftKings.
According to their quarterly results report, DraftKings’ revenue increased by 57 percent, bringing their total revenue to $790 million. Remember that this is only for the third quarter of 2023 or for July to September. For comparison, DraftKings’ second-quarter revenue was only up by 15 percent; clearly, the third quarter was an active and profitable period.
Wall Street investors are just as happy with DraftKings. After the company announced its massive revenue growth, its shares increased by 16 percent. DraftKings claims their combined strategy of retaining sports betting and online casino customers contributed to their rapid growth.
Why is this growth significant for DraftKings?
DraftKings’ significant growth might seem like everyday news to most, but it’s been a long time coming for the company itself. They’ve been playing catch-up with FanDuel for years and have always come short.
It wasn’t until October 2023 that DraftKings finally overtook their fierce rivals, claiming 31 percent of the sports betting and online gaming market, compared to FanDuel’s 30 percent. If this revenue growth is any indication, DraftKings will continue occupying the top spot in the foreseeable future.
As DraftKings CEO Jason Robins said to analysts during a conference call, his company is currently winning.
Will DraftKings stay at the top spot?
As much as DraftKings would love to stay the market leader, it has a lot of work to do. Their biggest hurdle at the moment is the recent launch of ESPN Bet, which went live in 17 states on the 14th of November. ESPN’s brand recognition will attract potential customers, which could prove challenging for incumbents such as DraftKings.
Another concern is their market lead over FanDuel is relatively small – a little over 1 percent. Competition is fierce in a seemingly saturated market, so a 1 percent lead is actually more important than it seems. But it also means that FanDuel, or another competitor, can easily take the lead soon. DraftKings will have to continue its growth strategy aggressively if they are to stay as market leader.
What’s next for DraftKings?
After such a stellar third quarter, DraftKings has a lot to look forward to as they approach the end of the year.
They are currently waiting for Maine and North Carolina to open their markets following the legalization of sports betting. DraftKings is undoubtedly at the front of the line, waiting to obtain a license to welcome customers once everything is ready.
The sports world is also approaching an exciting point in the season. Betting is expected to rise as we approach the holiday season, with special games such as Thanksgiving and Christmas Day Football. Analysts expect a 17.3 percent increase in the sports betting market by the end of 2023, while the online gaming market is expected to increase by 12.9 percent.