Tired of all those DraftKings and FanDuel ads shown ad nauseam during college and NFL football games? Well, we have some bad news. . . . They aren’t going away anytime soon, mostly because they are effective. According to Bloomberg News, DraftKings and FanDuel pulled in a combined $60 million during the first week of the NFL season. Las Vegas only pulled in $30 million for one of its biggest weeks of the year outside of the Super Bowl and March Madness.
There has been a sharp increase in daily fantasy site use as fans who may have bet illegally before look for more accepted ways to gamble on Sundays. The two major sites are now so ingrained in the sports business landscape that they have official deals with all the major U.S. leagues and most teams. The sheer fact that the betting is legal allows it major access to intrigued fans who may not have wagered on sports before. It increases engagement and also popularizes talent as daily fantasy players start to learn lesser-known names in every league. Daily fantasy sites have been a huge win for these technology companies and the leagues alike.
Some will argue the $60 million vs. $30 million comparison isn’t fair. Las Vegas has only a set number of gamblers interested in sports betting. Compare that to the reach of DraftKings and FanDuel, which have almost nationwide access (excluding Arizona, Iowa, Louisiana, Montana, and Washington). Therefore, it could be argued that if sports gambling was legalized, the Vegas number — betting on games with a spread — would exceed the income of the daily fantasy sites. Even if that’s the case, $60 million is nothing to laugh at and shows just how much revenue daily fantasy sites can generate.
That revenue number is so large that many people are calling for Congress to take another look at the legality and control of these “games of skill.” It will be interesting to see where this positions gambling nationally. There are really three options: 1) Congress avoids the issue and nothing changes; 2) Congress severely limits daily fantasy sites; or 3) the tide turns and gambling laws are relaxed.
The third option may be inevitable. Gov. Chris Christie has pushed multiple times for legalized sports gambling in New Jersey, but was recently denied. NBA commissioner Adam Silver has suggested providing regulated wagering options. And, finally the success of DraftKings and FanDuel shows an enormous market exists.
Michael Colangelo is Managing Editor of The Fields of Green and Assistant Director at the USC Sports Business Institute.