On September 6, the reigning Super Bowl champion Philadelphia Eagles scraped out a victory against the Atlanta Falcons at Lincoln Financial Field. The matchup not only signaled the start of the 2018/2019 NFL season, it also marked the first time that Keystone State bettors were able to put real money on fantasy football completely legally.
While fantasy operators usually spread contests over half-a-dozen sports, NFL is undoubtedly the most popular. So it was no surprise that, before the season began, revenue at PA’s nascent fantasy sites was revealed to be downright paltry.
Today, with the season in full swing, the Pennsylvania Gaming Control Board released its fantasy revenue figures for September. The numbers showed a very expected spike in earnings, but are hardly impressive compared to what other expanded gambling verticals are expected to bring in when they launch shortly.
Last month, the fifth month of legal PA fantasy sports, operators took in $22.2 million in fees from Commonwealth punters – more than double the amount collected in August – banking $2.1 million in adjusted revenue.
For their part, regulators pocketed $320,057, bringing the all-time tax total paid up to nearly $1 million.
Top-line fantasy overview for September
- September handle: $22,236,062
- YTD handle: $66,250,421
- September adjusted revenue: $2,133,713
- YTD adjusted revenue: $6,305,087
- Adjusted revenue M/M % change: +126%
- YTD Taxes: $945,763
A cornered market
To the shock of no one, industry leaders DraftKings and FanDuel absolutely crushed their competitors. Together, the pair represented an astounding 99.5% of the entire PA fantasy market, leaving only scraps for their lesser-known competitors.
DraftKings led the way with $11.58 million in total handle and $1.17 million in adjusted revenue. FanDuel, its longtime rival, was right on its heels with total collected fees of $9.93 million and $948,838 in earnings.
Lesser sites hoping to grab even a small slice of this market face a tough road ahead against the two DFS behemoths, which have spent so much on advertising and marketing that nearly all sports fans are aware of their brand names.
What’s more, the two operators entice bettors, especially during football season, with massive guaranteed prize pool contests, which few other can match.
Case in point: To kick off the season, DraftKings lavished football bettors with $2.5 million in prizes during the Thursday Millionaire Battle of the Birds, while running a $5 million Roman Fantasy contest, along with a $2 million Play-Action contest.
But the fun doesn’t end there, DraftKings and FanDuel will give out many more millions during their flagship NFL GPPs, the Millionaire Maker and the Sunday Million contests, respectively.
Gathering up the crumbs
Surprisingly, only a few other PA operators were able to capitalize on the start of NFL season, with others actually earning even less M/M. Most will have a long way to go before they recoup their $50,000 state licensing fee.
DRAFT, a DFS operator which was recently scooped up as a part of the Betfair Paddy Power/FanDuel acquisition, came in a very distant third place. The operator banked just under $20,000 in adjusted revenue for a whopping 0.92% share of the market. On a brighter note, however, the figure represents an 83% increase over the previous month.
Boom Fantasy enjoyed an even bigger M/M gain (87%), but raked in a measly $1,336.
Fantasy Draft, SportsHub and Full Time Fantasy also earned virtually nothing for the month, banking $1,088, $270 and $241 respectively.
From there, things only get worse. Fantasy football Player’s Championship, a season-long fantasy site, collected $64,457 in fees, but has yet to earn any adjusted revenue.
Yahoo! Fantasy, the only operator to have lost money on contests since the industry went live, went even further down the rabbit hole in September with an additional $12,000 in losses, about a 1,000% M/M decrease.
Eyes on the prize
Fantasy revenue is but a drop in the bucket compared to what sports betting is expected to bring in when that vertical goes live in Pennsylvania in the coming months.
While they have made a modest profit in PA, FanDuel and DraftKings undoubtedly have their focus trained not on DFS, but on sports wagering.
In New Jersey, both companies have launched online sports betting sites and mobile apps, with FanDuel partnering with The Meadowlands and DraftKings with Resorts.
While sports betting is currently offered at eight physical Garden State gambling venues, the real opportunity lies in mobile and Internet betting, something at which FanDuel and DraftKings excel. In fact, Rush Street Interactive claims that around 80% of all bets made at its NJ sportsbook are placed on a mobile device. This will likely be true industry-wide.
In New Jersey, the numbers tell the tale. While DraftKings banked $1.17 million in DFS revenue in PA last month, it played a large part in the $8.5 million in revenue taken in by its licensee, Resorts, which also hosts the BetStars NJ online sportsbook.
FanDuel, which launched on September 1, added $2.85 million dollars to its coffers in NJ, nearly $2 million more than it made in DFS revenue in the Keystone State last month. As the public begins to become aware of the legality of sports betting in the area, those numbers will only rise.
The opportunity in PA, which boasts a population of nearly 4 million more than New Jersey, could be much bigger — GamblingCompliance estimates that PA sports betting could generate upwards of $310 million annually.
While neither FanDuel nor DraftKings have solidified partnerships in PA, we believe it’s only a matter of time before Valley Forge announces a sportsbook in conjunction with FanDuel. DraftKings, for its part, will have to find itself a partner in the Keystone State, but with its current success in NJ making waves, that shouldn’t be too hard.