DraftKings Competitors: The Other Players In The Online Betting Space

DraftKings has received a lot of attention from investors since going public in 2019, but its online betting competitors are gaining ground.

Since sports betting became federally legal in the U.S. in May 2018, DraftKings (NASDAQ: DKNG) has been focused on grabbing as much market share as possible. The company has been successful in leveraging its existing base of daily fantasy sports users and its brand in the sports world to gain a solid foothold in the online betting space. 

As more states legalize different forms of online gambling, the pie gets bigger and bigger for operators, leading to fierce competition for DraftKings.

1. BetMGM

BetMGM is a joint venture between MGM Resorts International (NYSE: MGM) and Entain Plc (formerly GVC Holdings). The latter has a wide range of online gambling brands under its umbrella across the world, including Ladbrokes, Coral, and partypoker. It can provide a lot of expertise to help optimize BetMGM’s offering, which covers both online sports betting and online casinos.

The MGM brand is well-known in the U.S., having almost 30 properties dotted around the nation. The integration of its M life Rewards program will be attractive for those people who are looking to earn rewards from betting that can be redeemed at MGM properties.

One of BetMGM’s main growth strategies is signing partnership deals with major sports teams in the states in which it is launching. Some of its partners to date include the Washington Nationals, Detroit Lions, Denver Broncos, and Philadelphia 76ers.  

It has sportsbooks in ten states so far, with the operator’s net revenue being $178 million in 2020. As BetMGM is spending big on marketing efforts, it will take some time to be profitable. In MGM’s latest earnings release, the company spoke about BetMGM’s potential, stating: 

“We are also deeply focused on our long-term goals including investing in digital to drive deeper customer engagement and BetMGM, our U.S. sports betting and iGaming venture, which continues to impress as the leading operator in U.S. iGaming and the top three operator in U.S. online sports betting.”

For investors, BetMGM being a joint venture does dilute interest, especially since MGM’s approach to takeover Entain Plc for $11.1 billion was quickly shut down in January.

2. Caesars Entertainment/William Hill 

William Hill has been in the U.S. sports betting market for years, operating in the Nevada market when it was the only state legally able to offer such a service. Caesars Entertainment (NASDAQ: CZR) acquired the U.S. assets of William Hill back in April of this year in a deal worth $4.04 billion.

William Hill already has sportsbooks live in 14 states, it can leverage the presence of Caesars properties across the country, and boasts vast experience in the European market. In Q1, net revenues were up 1% year-on-year due to challenges relating to the COVID-19 pandemic. However, the company does seem in a better place than its competitors to absorb these unimpressive results, with William Hill’s margins both in its physical shops and online flat year on year. 

As well as its exclusive relationship with Caesars, William Hill also has its odds integrated with the popular CBS Sports and ESPN apps. Caesars itself has an online casino currently live in three states. Therefore, if the merger with William Hill is successful, sports betting and online casino bases will be covered.

3. FanDuel

DraftKings and FanDuel were battling it out for supremacy in the daily fantasy sports market long before legal sports gambling came around. 

Just like DraftKings, FanDuel has a base of fantasy users it can cross-promote to and leverage its existing brand. It is majority-owned by Flutter Entertainment, which also owns major brands such as PokerStars, Paddy Power, SkyBet, and Betfair. This relationship provides a wealth of knowledge and experience in various major gambling markets — especially Europe — that FanDuel can leverage.

FanDuel and DraftKings are pretty neck and neck in terms of states in which they have a presence. In terms of online casinos, FanDuel operates in Illinois, Indiana, Iowa, Colorado, Virginia, Pennsylvania, West Virginia, New Jersey, Tennessee and Michigan while DraftKings has casino sites in New York, West Virginia, Indiana, Iowa, New Hampshire, and Mississippi. 

In terms of market share, FanDuel had control of 40% of the online sportsbook U.S. market in Q4 2020, down from 46% in the previous quarter, with 28.3% market share globally. FanDuel also captured a 20% market share slice of the entire iGaming. According to the company’s website, FanDuel now has over 12 million registered users.

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MyWallSt operates a full disclosure policy. MyWallSt staff currently holds long positions in companies mentioned above. Read our full disclosure policy here