Last updated: February 14, 2024
FanDuel and DraftKings together have more than 70% of the US market for online sports betting.
FanDuel CEO Amy Howe recently said again that the biggest online sportsbook in the US will make money this year, even though she acknowledged that the market is getting more and more competitive.
In the first half of this year, the Flutter Entertainment (OTC: PDYPY) unit made cash. Howe said that FanDuel will probably make money all through 2023 based on earnings before interest, taxes, depreciation, and amortization (EBITDA). If that happens, it will be the first US-based online sportsbook to do so.
Howe told Contessa Brewer of CNBC at the CNBC Global Evolve virtual summit on Thursday that FanDuel is ready to compete with new companies like Fanatics and Penn Entertainment’s (NASDAQ: PENN) ESPN Bet that are getting into the domestic sports betting market.
Howe talked about how important it is to have a great experience with a product. He also said that the success of a product depends on how well it works, not on how strong its brand is. To stay competitive in the market, he stressed how important it was to give users a truly amazing experience.
DraftKings (NASDAQ: DKNG) and FanDuel (NASDAQ: DK2) together have more than 70% of the betting market in the US.
Howe agreed that size is important, even though he said the US sports betting business is still young.
Howe used different parts of e-commerce to show how important scale is in the sports betting business during the interview. She talked about how important it is to have a big operation for long-term success and to stay competitive in the market.
A lot of people use scale to their advantage, and both FanDuel and DraftKings are very good at it. This is another reason why analysts think both companies will do well. There are 36 states and Washington, DC that allow legalized sports betting. In 21 of those places, FanDuel has either an online or a physical sportsbook.
Data shows that FanDuel and DraftKings are the market leaders. This makes their customers very loyal. On the other hand, it’s hard for competitors to do well in that area.
Bets on sports are still pretty new in the US, and it’s still hard to get started. FanDuel and DraftKings are already the market leaders, which makes this even worse.
Howe talked about how hard it is to get into the market for online sports betting on CNBC. He focused on how important it is to get licenses and understand the complicated rules and laws. One thing she talked about was how expensive it is to make a good product and tech platform. Howe also talked about how a lot of money needs to be spent to bring people to the platform in a responsible way.
In the United States, the sports betting business has lost a lot of people over the last five and a half years as many owners have shut down or sold their companies. Some people have cut back a lot on activities related to this because they don’t want to waste money on bad things just to get a little more market share.
Will is a former Grosvenor croupier who relocated to Chicago from London in 2013. Not only is he a highly skilled poker player, but he is also an expert in the art of deception, gambling cons, and the world of crypto. Now he uses his knowledge and experience to write and edit detailed reviews of online casinos in a bid to help players avoid online scams and losing their money to rogue gambling sites.
