DFS industry—what is the state of the financse?

What State is the DFS Industry In?

The path trodden by Daily Fantasy Sports sites—both new and well-established—has been notoriously treacherous. This is particularly the case in the UK, where several of the big players—Mondogoal and FanDuel, for instance—have ceased trading.

The situation for DFS sites has not exactly been rosy in the US, either. With the ongoing question into the legality of DFS across several states, the thwarted merger of FanDuel and DraftKings, and multiple allegations of corruption, the odds have been stacked against DFS from the start.

Naturally, this can cause us honest Daily Fantasy Sports fans to worry. Will we be able to play DFS forever, or will it just be a flash in the pan, another failed entrant to the incredibly volatile gambling industry? Reports of DraftKings and FanDuel making huge losses did nothing to settle our nerves.

Surely things are on the up for Daily Fantasy Sports? In this article, we examine the current state of the DFS industry.

Recent DFS finances

A calculator and finance sheets

For a more comprehensive analysis of Daily Fantasy Sports, check out this brief history of DFS.

Information on the exact financial states of the major DFS sites had been fairly scarce. Many people assumed that because DraftKings and FanDuel were spending huge amounts of money on advertising—most notably during the Superbowl—that their incomes must be through the roof. Indeed, DraftKings could well be considered a household name in the US—surely these sites were well in the black?

Unfortunately not. While with any new business venture there is a huge element of risk, it was exposed at the end of 2016 by several different sources that DFS sites were, in effect, ‘money pits’. Losing millions of dollars a year, the future wasn’t looking great for DFS.

This isn’t even taking into account the effective closure of Mondogoal (this was a real blow as it was one of our favourite places to play daily fantasy football), and FanDuel’s decision to abandon the UK market entirely. But what’s the situation now?

The current state of the DFS industry

Recent figures have shown that the total amount of entry fees taken by all regulated DFS sites over the course of 2016 is $3.2 billion. This is roughly comparable to the previous year’s takings.

Unfortunately, these statistics aren’t broken down by each individual company, so it’s impossible to say whether DraftKings or FanDuel is leading the race to the top. However, judging by a comparison of the Google search volume of the two sites, DraftKings is noticeably more popular, although traffic to both of these DFS behemoths has declined significantly in recent months.

Comparison between search volume of DraftKings and FanDuel

We haven’t been given a breakdown of profits and liabilities for any of the companies, either, but with incoming revenue roughly the same as 2015, it would be difficult to define DFS as a growth industry.

So, this isn’t good news for the Daily Fantasy Sports industry, but it’s not bad news either. With dedicated fans like you, we’re sure that DFS will live on. So, keep playing, and more importantly, keep enjoying DFS!

Don’t forget to check back for more DFS tips, tricks and news. At DFUK, we’ve got you covered!

 

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