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The Rise and Fall of Daily Fantasy Sports

Daily Fantasy Sports ("DFS") - a daily version of a typically months-long fantasy sports season - took the sports fan world by storm in 2015, with two companies leading the charge: DraftKings and FanDuel.
Investors rushed in: in June 2015 FanDuel raised a staggering $275M in funding, then a month later, DraftKings grabbed $300M of its own.

DFS websites exploited a legal loophole classifying them as "skill games", different from plain old "sports betting", which made them legal and easily accessible in most of the U.S.

Both companies bombarded fans with non-stop TV commercials, spending a combined $150M in a three month stretch.

Then, the premise of DFS being different from "gambling" began to be challenged. In December, a judge ruled DFS illegal in New York, and other states soon followed suit.

We looked at the TXN competitive analysis application leveraging our panel of over 3 million U.S. credit and debit card accounts to see how the two DFS companies fared since:

Consumer spending peaked in September 2015 coinciding with the start of the NFL 2015-16 season and the marketing blitz. Then - a steady and dramatic decline. With the start of the current NFL season, spending recovered in September 2016 to only about 40% of a year before.

Looking at the spend-per-customer chart:

We see an almost mirror image. This means the players who participate at "peak season", the start of the NFL season, are casual players who spend less per person. The players that continue to be engaged at other times are on average the more dedicated, bigger spenders.

It remains to be seen whether DFS popularity will grow back to its glory and whether the casual players will return en masse.

Learn more about consumer spending analytics with TXN.

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