DAILY FANTASY SPORTS FORECASTS CUT
DFS market grew just 4 percent in 2016
Latest statistics from the independent research company Eilers & Krejcik Gaming will give daily fantasy operators pause for thought – especially DraftKings and FanDuel who are about to merge and hold 90 percent of the market.
Researchers found that DFS revenue grew by about four percent last year to c. $3.26 billion, but the market leaders remain unprofitable. Earlier forecasts had predicted around $4 billion, rising to $8 billion over the next four years, but E&K have rowed back on that estimate, saying that a more realistic figure is now $4.8 billion by 2020.
Thanks to heavy marketing spend, legal and PR-lobbying costs over the past 18 months, profits remain elusive for the market leaders, and growth has slowed due to a relatively static player base comprised mainly of white, 25 to 35-year-old males.
Conversely, the traditional season-long fantasy sector is attracting five times the number of players that DFS can muster, and is enjoyed by almost 60 million players.
Arguments continue in many states regarding the status of DFS and whether it is legal; some 10 US states have legalized the variant as a skill-based game therefore exempt from online gambling laws.