DraftKings CEO expects US market leaders to remain in place
Jason Robins says further consolidation will come at the top of the market, as smaller brands learn to operate at lower levels of scale
DraftKings CEO Jason Robins has claimed challenger brands in the US will “figure out how to survive at smaller levels of scale”, as he forecast his company and FanDuel to retain their stranglehold.
Speaking at the fourth annual Craig-Hallum Online Gaming Conference yesterday, 2 December, Robins was bullish on his outlook for the Boston-based operator and its long-term rival in being able to fend off the chasing pack.
The pair have been able to use the springboard of their legacy DFS customer bases to leap into leadership positions in the US real-money gaming race.
While DraftKings did not disclose its market share figures as part of its Q3 earnings report, FanDuel parent company Flutter said its total online market share across sports betting and igaming is 35%.
DraftKings has battled with FanDuel for market leadership consistently and, in Q3 2023, overtook the brand as market leader, as per Eilers & Krejcik Gaming (EKG) data. FanDuel subsequently retook the lead the following quarter.
In comparison, BetMGM, which has long been flagged as the ‘best of the rest’ in the US, had a market share of 15% as of Q3.
As per the EKG Line newsletter, released last week, the boutique analyst firm said Fanatics had recently garnered a 4.8% market share and, along with bet365, was one of the challenger brands “capable of making a dent”.
Robins said that while DraftKings welcomed competition, and in fact was spurred on by the presence of pressure, he was steadfast in his opinion the company would continue to lead the pack.
The CEO remarked: “I think that it is important to always have new competition, aggressive competition in the market. It keeps the team focused on winning with the customer and it keeps that edge.
“We’ve always, for better or worse, been a company that does better when we feel like we’re under some sort of pressure. It’s easy to get complacent when you don’t have that.
“We’ve seen now multiple waves of competitors. No one has been able yet to make a dent in the top two of the market. I don’t think it’s likely that you’re going to see that.”
The DraftKings CEO added that the future online US market would continue with the operator and FanDuel leading the way, with other firms settling for operations at a lower scale.
Robins’ comments come after a host of tier-two and tier-three operators have pulled out of the market, including Betway, Kindred Group and Superbook. Meanwhile, Betfred has shuttered all but one of its online sports betting states.
Robins continued: “We also don’t take anything for granted. I think that everything that we do every day, we have to earn with the customer and we realise that.
“There’s always a potential for disruption if you take your eye off of that. I think having that edge, having the ability to always point to somebody coming after us has been helpful.
“I think that’ll continue. I don’t think that there’s going to be a huge dynamic effect, if anything, I think you’re going to see more consolidation at the top in terms of share. What I also think you’re going to see is a lot of companies that are losing money now will figure out how to survive at smaller levels of scale.
“As long as you’re profitable, you can continue to keep going. I see more consolidation of share at the time, but I also don’t see a complete disappearance of the long-tail competitors either.
“It doesn’t mean you can’t build a nice little company on a few percent share finding a niche in the market. There’s always going to be somebody that is the next kind of threat or the next one that everyone’s talking about,” he added.