As expected, the vertical is contributing a nearly negligible amount of revenue to state coffers.
The report covers the entire month of May, in which the state’s 10 recorded operators generated $1,331,706 collectively, with $199,756 paid to the state.
Two operators mop the floor with the rest
The Pennsylvania fantasy sports market is proving a tough one for companies that aren’t branded FanDuel or DraftKings.
Collectively, the power duo comprised 98% of industry revenue. FanDuel led the pack at $673,014 for a 50.5% market share, with DraftKings only slightly behind at $632,009 (47.5% market share).
As for the rest, well…the third best performing site was DRAFT, which locked up $16,992 in revenue. In a distant fourth was the once promising Yahoo Fantasy Sports site, which generated $4,430.
Beyond that, the numbers go from bad to embarrassing, with two operators (Full Time Fantasy Sports and Fantasy Football Players Championship) taking in exactly zero dollars in adjusted revenue. Alternative daily fantasy sports site FastPick only did slightly better at $319 in revenue, with the remainder bringing in less than a fry cook does in a month.
This is not an unexpected result, as it’s widely known that FanDuel and DraftKings are the only truly recognized brands in daily fantasy sports. However, the newly issued report exhibits just how large the gap has grown between the haves and the have nots.
Smaller site, better value
The report also provides us with other useful information, namely how much rake users are paying. In total, the industry took in $12,430,588 in total fees from Pennsylvanian participants, with just a hair over 10.7% going to the house.
Of the industry’s two giants, players on DraftKings got the slightly better bargain, forking over 10.6% of their entry fees to the operator. By comparison, FanDuel took 11.2% off the top.
Other sites, in what is presumed to be an effort to grow their business, took significantly less rake. For instance, Fantasy Draft collected $60,336 in total fees, but only collected $2,500 (4.1% rake), while Yahoo kept just 2.1% of its handle.
A small slice
Fantasy sports contests were legalized in Pennsylvania as part of a much broader gambling expansion package, penned into law last October. The vertical was not expected to be a boon for the state, and the initial revenue tallies all but confirm that.
As a point of reference, Gambling Compliance sees Pennsylvania generating somewhere in the vicinity of $310 million annually from online sports betting alone. Online gambling also stands to perform strongly, with most analysts predicting $150 – $200 million in first-year revenue. In neighboring New Jersey, online casino revenue came in at $24.3 million for the month of May.
That being said, optimism surrounding the industry in Pennsylvania has faded of late, as potential license holders aren’t exactly lining up to submit their applications — presumably due to the sky-high 41% effective tax rate on sports betting, and the 54% rate on online slots.
Still, even in a doomsday scenario iGaming and sports betting should prove far more valuable to the state than fantasy sports contests, which are on pace to generate roughly $16 million annually, with $2.4 million going to the state.