U.S. daily fantasy sports revenues remain stagnant

[The Buzz]

The daily fantasy sports industry has not grown very much in the last year, generating $3.2 billion in entry fees and about $335 million in revenue in total, according to an article from Legal Sports Report, which obtained the data from the New York State Gaming Commission, which details DFS performance beyond just New York.

From the article:

The last time LSR obtained comparable data, it included handle and revenue from September of 2016 — the first month of regulated and taxed DFS in New York — and ending in August of 2017. That means there are five months of overlap, and seven months of new data, from September 2017 through March 2018.

The 2016-2017 data showed about $3.2 billion in handle as well. Revenue clocked in at $327.3 million, meaning an increase of just under $8 million, or 2.4 percent from the previous timeframe.

The lack of any kind of meaningful growth in the DFS sector is something that few forecast circa 2015, when DraftKings and FanDuel were raising hundreds of millions of dollars.

Absent a path to growth in DFS, both are exploring options elsewhere — namely sports betting. Paddy Power Betfair is acquiring FanDuel in order to use it as a sports betting brand in the US. And DraftKings sports betting is coming to New Jersey and any other state it can get into.

In any event, the above numbers show why getting into sports betting is a prudent — and perhaps necessary — move for the two DFS operators.

Read the full article here: https://www.legalsportsreport.com/21627/ny-dfs/

[TheGooner]

Very interesting development. I WAS surprised at the massive P/E prices put on the companies when they were raising capital.

I wonder if fantasy sports is failing to grow because many people simply cannot be bothered with the time required to be competitive in the game.

[Sherlock]

I WAS surprised at the massive P/E prices put on the companies when they were raising capital.

FOMO by classic gambling companies

[TheSpry]

Very interesting development. I WAS surprised at the massive P/E prices put on the companies when they were raising capital.

I wonder if fantasy sports is failing to grow because many people simply cannot be bothered with the time required to be competitive in the game.

I've sent a ton of DFS traffic since 2014. Traffic, signups, registrations and new players are way down. As is rev.

I think the time/effort and competition level is a huge part of it.

The pro's can easily and massively play against the field with hundreds of entries. A pro builds out his one optimized lineup and then can easily 'multi-table' against hundreds of opponents all at once. At least with poker a pro can only play a certain number of tables optimally.

The fish get eaten up quickly and don't keep playing.

[econfox]

I work mostly in the sports betting area but I have done some fantasy sports marketing. What I have noticed is over the last 4 months is the big fantasy sports corps have almost lost interest in it. Even on shows about "daily fantasy sports" there is a lot of talk about sports betting.
I also play DFS at low limits for some fun and I haven't seen any attempt at innovation recently. I think they are just investing very little and using the revenue channel to start developing a sports betting business.

Look for them to go all in on "prop betting". Some of the DFS content is starting to look like prop bet content.