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DraftKings Competitors: The Other Players In The Online Betting Space

DraftKings has gotten a ton of attention from investors in the U.S. since going public, but its 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. It has been able to leverage its existing base of daily fantasy sports users and its brand in the sports world to gain a solid foothold in the sector.

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

1. FanDuel

These two companies were battling it out for supremacy in the daily fantasy sports market long before legal sports betting 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, 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 has platforms up and running in Pennsylvania, New Jersey, and Michigan while DraftKings has casino sites in these three states plus West Virginia.

In terms of market share, FanDuel had control of 46% of the online sportsbook U.S. market in Q3 2020, with a 29% slice of the entire online gambling sector. It added 450,000 new users during the quarter, bringing its total player base up to 1.8 million active customers.

2. 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. 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.

3. 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) is in the middle of acquiring the U.S. assets of William Hill in a deal worth $3.7 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. For 2020, net revenues rose 32% year-on-year, including a 121% rise in Q4 net revenue.

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.

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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

Andrew O'Malley
Andrew O'Malley
Andrew is a contributing writer to MyWallSt. He is a full-time finance writer, having spent time working in the industry. He studied Economics and Finance and has been fascinated with the financial markets since his teens. The first stock that Andrew bought was Apple, reflecting his love for its products.