Sports betting booming

Despite an US industry-wide slowdown in sports betting handle growth over the fourth quarter of 2024, the vertical is booming in favor of the two runaway market leaders FanDuel and DraftKings. 

FanDuel and DraftKings have remained untouchable at the top

Many brands have fallen by the wayside since the gold rush to regulate sports betting markets from 2020-2022. While FanDuel and DraftKings have remained untouchable at the top, the latter closed the gap on the Flutter-owned sportsbook in 2024. The biggest shake up, however, is Fanatics Sportsbook’s rapid rise up the charts to threaten BetMGM’s position as bridesmaid to the two dominant brands.

Fanatics’ gain coincides with BetMGM announcing job cuts this week and Penn Entertainment mulling washing its hands of its co-owned ESPN Bet.

As the return of Donald Trump to power adds another pro-gambling, crypto-friendly layer to the mix with prediction markets the hot topic, VegasSlotsOnlineNews previews a pivotal year ahead for the sports betting vertical. 

Battle at the top

Despite briefly knocking FanDuel off its perch in Q3 2023, DraftKings has played second fiddle to the brand since the early days of regulation in 2018.  

Fast-forward to 2025 and DraftKings finds itself in the position to claim FanDuel’s crown once again. 

For Q4 2024, DraftKings finished with the biggest share gains of all US sportsbooks. The Boston brand’s stock spiked up around 11% over the last 12 months as it posted Q4 revenue of $1.39bn. 

FanDuel dropped 68 basis points of market share 

DraftKings’ expectation that its stock will rise 25% in 2025 is contrasted by FanDuel’s market share slippage. According to JMP Securities, FanDuel dropped 68 basis points of market share “by handle month-over-month and a more substantial 512 basis points year-over-year.” 

Even though DraftKings is closing the gap on its rival, the two brands are a country mile and more ahead of other US sportsbooks. FanDuel’s US revenue for Q4 2024 climbed 14% to $1.61bn, driven by the 8% growth of its sportsbook revenue. 

DraftKings Q4 revenue of $1.39bn against FanDuel’s $1.61bn both reveals how relatively close the former is getting, and how far behind the rest of the chasing pack is to first and second. 

That said, one of the US’s most recognized sports brands challenged the status quo in 2024 by making a big push for third place. 

Rise of Fanatics

The market player making the biggest waves right now is Fanatics Sportsbook, a subsidiary of the US sportswear giant owned by CEO Michael Rubin. 

Fanatics’ rise to sports betting prominence has been meteoric since it was founded in 1995 as a manufacturer and retailer of licensed sports merchandise and collectibles. In March 2022, it raised $1.5bn at a $27bn valuation. Three months later, Rubin sold his stake in the Philadelphia 76ers and the New Jersey Devils to comply with regulations for entering sports betting, stating iGaming was a “very significant business long-term.”

Fanatics only really entered the sports betting race late 2023 after it won a bidding war to buy PointsBet’s US assets for $225m. By December of that year, thanks to white labeling its new PointsBet assets, the launch of Fantatics Sportsbook in Colorado gave Rubin’s brand its eighth legal sports betting state.

Now available in 23 states, Fanatics has captured 6.7% market share against FanDuel’s 36.9% and DraftKings’ 36.3% as of January 31. While the gap is huge, Fanatics overtook Caesars, which is languishing at 5.3%, and is eating into BetMGM’s 7.5% market share.

Fanatics flourishing, DraftKings on a roll, and FanDuel holding steady. This can only spell trouble for the other sports betting players in the US.

Fall of the House of Mouse, BetMGM?

In stark contrast to the top two and Fanatics, the chasing US sportsbooks are struggling to stay relevant. The biggest potential casualty is ESPN Bet, which entered the market around the same time as Fanatics. 

“hail mary” for the two brands

In the fall of 2023, when many analysts hailed the Disney/Penn Entertainment collaboration on ESPN Bet as an “industry shake-up,” one insider called it a “hail mary” for the two brands. 

Sports business analyst Joe Pompliano said back then that the move was “five years too late” and born of desperation over Penn’s Barstool sports betting partnership nightmare, and ESPN’s “declining cable viewership.”

Pompliano’s warnings came back to roost in late February when Penn Entertainment CEO Jay Snowden told shareholders the company can opt out of ESPN Bet deal in 2026 after it “failed to meet market expectations over the past 1.5 years.”

Penn posted a staggering Q4 loss of $109.8m from its interactive arm, which includes ESPN Bet’s online business. ESPN Bet sits sixth in the market, its 3% share behind fifth place Caesars Sportsbook with 5.3%.

The other casualty of Fanatics’ rise and the top two’s consolidation is BetMGM, which earlier this week announced it was cutting 83 jobs in response to an industrywide slowdown in sports betting handle that the MGM Resorts International/Entain brand is struggling to contain internally. 

Natural born killers

High-profile brands such as MaximBet, which positioned itself as the only true “lifestyle brand” in the US sports betting industry, has joined the likes of FuboTV in exiting the market.

On Wednesday, media reports emerged that 888 Holdings is set to exit the US and will pay Sports Illustrated $30m to terminate the sports betting partnership that birthed SI Sportsbook and Casino, with another further $25m payable to SI between 2027 and 2029.

The struggles of MaximBet, SI Sportsbook, and now BetMGM and ESPN Bet highlight the natural advantage FanDuel, DraftKings, and Fanatics have. 

Gambling reporter Corey Sharp stated this week that BetMGM’s struggles are because it simply can’t compete with FanDuel or DraftKings for sports betting market share. Sharp stated that the two brands spent years building up a daily fantasy sports fanbase that made their pivot into sports betting a natural step, unlike BetMGM, which moved into the market via its online casino.

Despite accessing Penn’s sportsbook customer base, Disney’s hopes of building on its ESPN viewership to access millions of sports bettors hasn’t translated to any form of success for ESPN Bet.

What the future holds

While the future seems assured for brands like Fanatics, FanDuel, and DraftKings, who all entered the market with millions of sports-focused fans, 2025 could see more big-name rivals call it quits.

An added twist is the rise to relevance of prediction or event market betting. Deutsche Bank recently flagged competition from such platforms, which include Robinhood, Kalshi, and Polymarket, as a threat to traditional sportsbooks.

The German bank cited President Trump’s recent nomination of a Kalshi executive to head-up the Commodity Futures Trading Commission as a potential market changer.

FanDuel, unsurprisingly, is “monitoring the situation with these sports futures contracts closely.”

CEO Jason Robins stated in a letter to shareholders that the polarizing market “could be an interesting opportunity” but that the products offered “lack the richness of a true sportsbook offering,”