RESEARCH GROUP BULLISH ON DAILY FANTASY SPORTS
Juniper's latest reports predicts that consumer spend on DFS will double by 2021, with most of the action taking place in the United States.
The respected independent research organization Juniper Research has issued a new study on daily fantasy sports which predicts that consumer spend will double from $2.6 billion in 2016 to $5.3 billion by 2021, with market leaders DraftKings and FanDuel (currently in merger mode) serving 90 percent of consumers.
The study found that North America continues to dominate the industry with US regulatory loopholes denoting the activity a ‘game of skill,’ rather than gambling, and more than 75 percent of the worldwide DFS market originating in North America, with an estimated 50 million Americans playing some form of fantasy sports in 2015.
However, the report notes, both FanDuel and DraftKings have now entered the UK market, and therefore Western Europe is set to become the next major market over the coming five years despite concerns over guaranteed prize pools and revenue constraints, as well as issues with professional players.
Juniper's research author Lauren Foye cautioned in a statement this week:
“DraftKings and FanDuel have used aggressive marketing strategies that gave rise to accusations of false advertising and concerns with cost overruns. Both they and emerging players will need to quell suggestions that only 10 percent of ‘professional’ players win the monetary prizes on offer.”
Foye says that such concerns could be addressed through private leagues, where users compete with friends, essentially removing the issue surrounding pro-players. Meanwhile, providers will attract casual players playing for smaller prize pools, alleviating some of the concerns surrounding liquidity.