As the leader in iGaming and online sports betting in the US, FanDuel may be losing ground to rivals DraftKings (NASDAQ: DKNG) and BetMGM.
FanDuel's online sprots wagering net gaming revenue (NGR) increased by 11% in the second quarter, according to a report released Friday by Eilers & Krejcik Gaming (EKG). This growth rate is good, but it is far lower than the 56% and 45% growth rates reported by BetMGM and DraftKings.
"FanDuel and DraftKings added $430 million in new NGR between them in the quarter, and DraftKings accounted for around three-quarters of that ,” observes EKG. “Given the overlap in customer base, that’s NGR going to DraftKings and not FanDuel.”
The fact that FanDuel is owned by Flutter Entertainment (NYSE: FLUT), the biggest publicly traded gaming company globally in terms of market capitalization, suggests that it has the financial means to fend off rivals and keep expanding.
FanDuel Continues to Succeed
The Flutter unit is still going well even though FanDuel, one of the most valuable gaming brands in the world, may be losing some NGR ground to competitors. Not at all.
As EKG notes, FanDuel might be a victim of harsher comparisons as well as its own success. With respect to the latter idea, there comes a time when the law of large numbers takes effect and makes it challenging for revenue to continuously increase at high rates. On the other hand, smaller rivals are using lower top-line bases, which makes it simpler for them to surpass FanDuel in terms of NGR growth. Additionally, FanDuel is outperforming DraftKings and BetMGM in other ways.
“FanDuel is indeed lapping a 2Q24 net revenue margin of 10.0% compared to 6.4% margin for DraftKings and 5.9% for BetMGM, as well as a much higher revenue base,” adds EKG.
Additionally, the research agency notes that online sportsbook providers' nationwide net hold was 8.13% in the second quarter. FanDuel was nearer 10%, BetMGM and Caesars Sportsbook were both below the national average, and DraftKings was in line with that percentage.
More Benefits Can Be Obtained by DraftKings
The most plausible challenge to FanDuel's dominant position is probably DraftKings, which is already the other half of a US sports betting duopoly with FanDuel.
“DraftKings also has potentially more upside to come given its 2Q25 net revenue margin of 8.7% vs. 10.4% for FanDuel, and no. 1 ranking in our OSB product testing,” says EKG. “That’s not to say FanDuel isn’t still the clear market leader. It is, but the gap to the chasing pack looks closer than ever, in our view.”