DraftKings Closing In On FanDuel In PA, But Can That Continue?

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With COVID-19 shutdowns devastating the sports betting industry this spring, one thing remained constant as everything else was thrown asunder:

DraftKings kept gaining on FanDuel in Pennsylvania.

The Boston-based company that recently went public took 28.1% of the $77.5 million in legal wagers placed in the state in May, according to the monthly figures released last week by the Pennsylvania Gaming Control Board.

That was 10.1 percentage points behind the 38.2% claimed by FanDuel, which has been far and away the state’s market leader since its first full month of operation in August 2019.

But that was the closest gap yet between the two in terms of the online/mobile share in the Keystone State, as DraftKings lagged nearly 40 percentage points behind FanDuel in its own first full month in December. The margin has nudged closer every month since.

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FanDuel has no competitor like DraftKings

The two operators share a lot in common — their daily fantasy sports histories, vast customer databases, ubiquitous TV advertising, and bevy of promotional offers to attract recreational bettors.

FanDuel got a strong leg up on its competitor for online customers by launching in July, well ahead of the lucrative football season, in affiliation with Valley Forge Casino Resort. (In Pennsylvania, an online sportsbook can only operate through agreement with one of the brick-and-mortar casinos that has obtained a sports wagering license.)

Though by December there were six other online sportsbooks besides the two multi-state giants, FanDuel took 52% of the state handle that month. (There are nine sites now, with three more possible this year — including one by Live! Casino & Hotel Philadelphia for which FanDuel will be the online operator.) That was the last of four straight months in which FanDuel handled more than half the online wagering volume in Pennsylvania.

Other online operators with broad experience, such as FOX Bet and Unibet, have also come along since September to cut into FanDuel’s dominance. None, however, has had the impact of DraftKings, which launched in early November through an agreement with the Meadows Racetrack & Casino and its owner, Penn National Gaming.

FanDuel stands far ahead in revenue

DraftKings’ share of the Pennsylvania online handle has climbed from 12.1% in December to 19% in January, 24.6% in February, 24.2% in a March dip, 27.4% in April, and 28.1% in May.

Due to COVID-related cutbacks in the sports calendar, however, the dollar amounts are far off what they once were. DraftKings’ May handle was $21.8 million, down from a peak of $72.3 million in February.

FanDuel’s May handle was $29.6 million, and its own peak came in December at $154.5 million.

In terms of gross taxable revenue — the amount earned after deducting the value of promotional credits handed out to customers — FanDuel stood at $2.5 million in May, off from a high of $7.7 million in January when heavy betting preceded the Super Bowl. DraftKings was just over $908,000 in May, down from a peak of $2.8 million in January.

Promotional credits abound for both

Both companies are willing to give up a significant share of revenue to offer promotional bonuses and credits to bettors, figuring it’s a strategy that pays off for them in the long run.

Back in January, FanDuel gave up $4.2 million in credits and DraftKings $2.8 million. No other operator devoted more than a half-million dollars to such promotions, which added up to $8.7 million statewide that month.

Again, the shrunken sports schedule has reduced the volume of credits of late, though the two continue to give far and away the most.

A comparison of their two sites finds certain promotional similarities. Both offer new customers, for example, a risk-free first bet of up to $500. And for customers trying out their linked casino gaming sites, both offer a refund of up to $200 for losses in the first 24 hours.

Aside from those, both offer differing promotions on daily events and futures bets that are often updated.

This past Saturday, for instance, FanDuel had multiple ways to place a losing bet but still get a refund of up to $50. You could bet the “method of victory” for a UFC fighter, and even if the method was wrong, you were refunded if he won his match. You could pick the wrong winner of NASCAR’s Geico 500, but you were refunded by FanDuel so long as the driver finished in the top five.

At DraftKings, placing a $10 live soccer bet Saturday entitled you to a second free live soccer bet worth $10. Placing a bet on a UFC main card fighter got you a free bet of up to $25 if he ended up losing by KO, submission, or DQ.

And in what may be the most enticing current offer to attract more action during the COVID era, DraftKings is offering a 20% deposit bonus (with 25X play-through requirement) through Aug. 17, for existing as well as new customers, for any deposit up to $2,500. That creates potential for up to $500 in free betting funds.

The better odds choice depends on the event

Aside from the different promotions, which for both sites typically include many odds boosts, there are reasons to check out odds on both FanDuel and DraftKings for comparison.

They are frequently different from one another, but in many cases also both better than what other sites in the state offer. And whether you come out ahead by using one or the other often depends on the specific event.

When Webb Simpson won the RBC Heritage golf tournament Sunday, those who had placed a bet on him Saturday morning on FanDuel would have come out ahead, receiving a +400 payoff instead of +350 from DraftKings.

But when Curtis Blaydes won the biggest UFC main card fight Saturday night, DraftKings bettors on him did slightly better, having laid -435 on him earlier in the day instead of -440 at FanDuel.

Ryan Blaney’s win Monday in the Geico 500 would have paid off exactly the same for a bet placed Saturday, +1100 at both sites.

If you’re placing a futures bet, which site you’re better off using will depend on which team you favor.

For the NFL’s next Super Bowl winner, for instance, FanDuel is the better place to bet on the Chiefs (+650 compared to +600) and Ravens (+700 compared to +650), but DraftKings is the better option for the 49ers (+1000 instead of +900).

Likewise for the NBA champion, where DraftKings’ payout of +250 for both the Bucks and Lakers is better if you’re taking the Bucks (+240 at FanDuel) but not if you favor the Lakers (+260 at FanDuel).

Combined, the two sites claim about two-thirds of all online wagering in Pennsylvania each month. Whether DraftKings can keep gaining on FanDuel is uncertain at this point, but their brand recognition, promotions, and odds have clearly made them the two favorites among the state’s online bettors, and that’s unlikely to change even as new sites keep being added.

Photo provided by Shutterstock

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Gary Rotstein

Gary is a longtime journalist, having spent three decades covering gambling, state government, and other issues for the Pittsburgh Post-Gazette, in addition to stints as managing editor of the Bedford (Pa.) Gazette and as a reporter for United Press International and the Middletown (Conn.) Press. Contact Gary at [email protected].

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