Daily Fantasy Sports Hitting a Plateau

Jake Cooper | 17 Mar 2017

Daily Fantasy Sports Hitting a PlateauWhile the last few years have seen a noticeable rise in the growth of daily fantasy sports, this trend may soon hit a plateau in many markets. Daily fantasy sports giants DraftKings and FanDuel inked a merger last year in an attempt to strengthen their industry presence, but their offerings’ popularity may be experiencing a temporary standstill. This may be good news for some sportsbooks who lost out when this type of betting suddenly experienced a surge in fan numbers.

Year on year, daily fantasy sports have seen a considerable growth from when they first hit the market. Appealing to sports fans with something different to traditional online sports betting, fantasy sports were quick to gain followers. However, a research report from Eilers and Krejcik Gaming notes that this trend may not last indefinitely, and that sports betting sites may pick up the slack.

The gaming firm’s report has cut industry forecasts quite dramatically, finding that revenues for daily fantasy sports grew by only 4% from last year, standing at around $3.26 billion in 2017. Revenues for 2016 were expected to surpass $4 billion, and the industry was previously estimated to be worth around $8 billion in 2020. However, due to slowed growth, the market projection for 2020 has been cut back to around $4.8 billion instead.

Major Brands to Resolve Issues

Both DraftKings and FanDuel have spent plenty of capital on impassioned marketing campaigns, and both have also faced legal expenses as a number of US states have challenged the legality of daily fantasy sports contests. By forming a merger, the companies are expecting to help solve these issues.

Growth has also plateaued for fantasy sports because its player base is still predominantly males between the ages of 25 and 35. Season-long fantasy sports still seem to have a much more universal appeal, with an estimated 5 times more players than daily fantasy sports.

However, although growth may be slow for daily fantasy sports now, their popularity is expected to pick up quite considerably by 2018 or sooner. The percentage of players who ‘play some form of daily fantasy sports’ in the US has risen from 31% in 2012 to 64% in 2015.

Daily Fantasy Sports Betting Figures Expected To Pick Up In 2018

Regardless of temporarily slowed growth, the future may still be bright for daily fantasy sports. This form of gambling has already been explicitly legalised across as many as 10 US states, which could see challenging states eventually follow suit to allow more widespread appeal of the form of sports wagering.

For now, operators that offer daily fantasy sports betting may experience sluggish revenues, which could see them choosing to focus on more popular avenues such as more traditional sports betting, mobile gaming and social casino games. However, experts suggest that the popularity of daily fantasy sports is bound to pick up soon. This could pose lucrative opportunities for licensed operators who will be able to legally offer this exciting new form of gambling to a legion of sports fans.