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While FanDuel and DraftKings continue to dominate the US sports betting market, one relatively new player may have moved into the No. 3 spot.
Citing a recent report from Citizens Bank, Earnings & More said Fanatics Sportsbook has now captured 7% of the US sports betting market, “more than double its share this time last year.”
With Missouri sports betting set to launch in December, Fanatics could see the Show Me State as a tremendous opportunity to grow its brand even further.
Can Fanatics maintain momentum?
The Citizens Bank report had FanDuel at the top in sports betting market share at 42%, followed by rival DraftKings at 33.5%. It’s quite a drop-off to Fanatics’ third-place 7%, but the report points out the company has already passed BetMGM’s 5.9% in just a couple of years in the industry.
Tom Johnson, CEO of sportsbook analyzer HoldCrunch, observed that Fanatics is offering bigger promotions and less competitive betting lines than competitors. He said that is understandable given the operator wouldn’t want to couple generous promos with generous pricing while trying to grow.
But Johnson also said that assessing how competitive Fanatics will be in the future is difficult to determine.
“The point being we don’t know how good they are versus peers. They may be very good, or not as good: with such a high promo multiple, it’s difficult to judge their performance or where market share would land once promos were at the same level.”
It’s also hard to gauge how significantly factors like Illinois’ graduated tax rates, hitting FanDuel and DraftKings the hardest and leading them both to enact tax-offsetting charges to customers, will shake up a market now largely shaped by those two operators.
In January, New York columnist Jennifer Saba reported for Reuters that the two sports betting giants have formed a “duopoly” on the market.
“FanDuel and DraftKings command 44% and 34% of the market, respectively, according to H2 Gambling Capital figures for operator gross wins, which is gambling-industry parlance for the amount staked minus payouts for winning bets. That advantage should perpetuate itself, since scale gives the duo more money for marketing and product development.
“Bigger gambling companies can also typically afford to offer tighter odds without sacrificing their revenue, mostly through smarter pricing, which keeps customers coming to their apps.”
Fanatics could seek a partnership
There are two types of sports betting licenses in Missouri. There are two “untethered” licenses available to sportsbooks not partnered with a casino or professional sports team, and 31 “tethered” licenses for operators connected to a sports team or riverboat casino.
DraftKings has already applied for one of the tethered licenses and is expected to partner with the NHL’s St. Louis Blues.
Underdog has applied for an untethered license as it seeks to operate independently in the Missouri sports betting market.
Fanatics could go either way at this point. One option is for Fanatics to partner with one of the pro sports franchises that doesn’t yet have a betting partner, the NWSL’s Kansas City Current or the MLS’s St. Louis City SC.
Last September, Fanatics made its first foray into partnering with the NWSL’s Washington Spirit, just before their run to the 2024 NWSL Championship match, where they lost to the Orlando Pride in Kansas City’s CPKC Stadium.
At the time of the deal with the Spirit, Fanatics CBO Ari Borod indicated the company could be seeking more partnerships in the future.
“As we continue to build out our sports betting business, we are excited to partner with the Washington Spirit. We will look to grow the Fanatics Sportsbook alongside the growing popularity of women’s soccer and women’s sports generally across the country.”
