DraftKings has been capturing market share from rival Fanatics, according to a new report by JMP Securities.
DraftKings has been capturing market share from rival Fanatics last month, according to a new report by JMP Securities.
Data from New York, Maryland, Indiana, Iowa, Maine, New Jersey, and Kansas, showed a 72% year-over-year handle growth in May.
This was primarily driven by favourable outcomes in the NHL and NBA playoffs, according to the analysts.
Overall, DraftKings secured a 36.2% market share based on gross gaming revenue (GGR), marking an increase of 371 basis points (bps) compared to May 2023 and a sequential gain of 544 bps.
JMP stated that DraftKings gained from Fanatics, which experienced a 28% decline in New Jersey.
FanDuel continues to lead
FanDuel, however, continues to lead the market with a 44.8% share of GGR, despite a year-on-year decline of 72 bps and a month-over-month decrease of 138 bps.
The operator reported a handle market share of 36.8%, which represented a decrease of 114 bps year-on-year and 51 bps month-over-month.
However, the analysts noted that FanDuel maintains a strong presence in states yet to report data, such as Pennsylvania, Illinois, and Arizona.
The company’s gaming margin was nearly 13% in May.
Together, DraftKings and FanDuel, owned by Flutter Entertainment, represented 81% of the total US market by GGR in May, a slight decrease from 84% in April.
Focus on ESPN Bet
In addition to the two market leaders, the analysts highlighted ESPN Bet for its performance.
According to the report, ESPN Bet achieved a sports betting margin of 10% in the four states where it is operational and reporting data.
In April 2023, ESPN Bet reported a margin of 7.7%, making May’s results an increase of 228 bps.
Despite commanding a modest 1.8% market share by GGR, this represents a year-on-year increase of 12 bps.
“We are watching for early signs of the parlay product improving into the football season before getting more constructive on the platform,” JMP stated.
Earlier this month, ESPN Bet’s performance came under the microscope when activist investor Donerail Group called for the sale of its parent-company Penn Entertainment.
Donerail Group’s managing director William Wyatt criticised Penn Entertainment’s strategy and capital allocation, arguing that these missteps have eroded shareholder value.
He described ESPN Bet as the company’s “newest bright and shiny object” that, while potentially valuable under different ownership, has not met expectations.