HomeThe ShuffleSlow Growth Predicted for DFS Giants

Slow Growth Predicted for DFS Giants


A new report suggests that the daily fantasy sports boom may have topped out and that DFS giants DraftKings and FanDuel will struggle to expand their player bases.

The report from Eilers & Krejcik Gaming suggests that the DFS market isn’t primed for new growth.

“It’s difficult to imagine a customer that DraftKings or FanDuel didn’t reach in the last three years,” reads the report that provides a forecast for the DFS industry through 2020. “International expansion may provide room for minor incremental growth, and there’s always a number of customers who weren’t legally able to play real-money DFS last year due to age restrictions that can now, but those sources aren’t anywhere near enough to get the two companies back on the growth track.”

DraftKings and FanDuel have raised a combined total of $1.2 billion in the last eight years. Estimates say the DFS market saw a total of $3.26 billion in entry fees in 2017. About 97 percent of the overall market was represented by DraftKings and FanDuel, according to Forbes magazine.

But total entry fees for DFS contests seem to have plateaued and are projected to grow only 2 percent in 2018 over 2017.

“Their best bet is to reactivate the roughly 85 percent of customers they’ve already acquired and then lost” said the Eilers & Krejcik report. “We expect not only a marketing focus on but also a product focus designed to draw inactive players back into the fold.”

The report also speculates that the two companies could have problems responding to legalized sports betting in the U.S., should the state of New Jersey win a case challenging a federal ban on sports betting before the U.S. Supreme Court. The Court is expected to rule on the case this spring.

Jason Robbins, CEO of DraftKings, has previously said his company is looking into offering a sports betting product alongside its DFS contests.

Eilers & Krejcik Gaming also presented a “bear case” scenario which would include the drying up of investment in the industry and player re-activation remaining stagnant. That scenario projects a decrease in DFS total entry fees to $2.5 billion by 2020.

Also, Google search data shows that searches for DFS sites are falling and was lower in 2017 than 2016. The report said the figures indicate a decline in interest among potential new customers and expects the trend to continue in 2018.

Finally, Eilers & Krejcik Gaming speculates that DraftKings did not turn a profit in 2017 and expects FanDuel—despite being profitable in the last quarter of 2017—to face a cash shortage in 2018.

Florida: Gambling’
Golden Nugget’s On
Rate This Article:

    Join the fun!

    Sign-up to receive the latest online gaming
    promotions, news and information!

    Honest Casino

    error code: 1001