Daily Fantasy Sports to be 4x Bigger than Online Casinos by 2021

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Daily fantasy sports exploded onto the mobile betting scene just a few short years ago. Through aggressive marketing, major players like DraftKings and FanDuel got the message out all over North America that daily fantasy sports is the newest and most entertaining way to enjoy professional sporting events – and perhaps make a few bucks in the process.

According to a new study by Juniper Research, the DFS betting market is nowhere near reaching its peak. The report indicated that, by 2021, the daily fantasy sports industry will continue to expand into new markets, and that revenue will swell to an amount exceeding that of online casinos by more than 4x – if the proper strategic moves are made.

The research, entitled ‘Daily Fantasy Sports: Growth Opportunities & Player Strategies 2016-2021‘, provides estimated growth for the market, as well as suggested strategies operators can utilize to increase revenue and player retention.

Strong Outlook for Daily Fantasy Sports

Daily fantasy sports, or DFS as its commonly known, allows sports enthusiasts to pay a fee to draft a fantasy team of players from a specific sports, such as football or basketball. Those drafted players then acquire points based on their performance in contests. The players who’s drafted teams earn the most points share in the prize pool.

The study’s author, Lauren Foye, believes the recent entrance of DFS operators into the UK market will result in continued expansion throughout Europe over the coming years, with the heaviest growth coming from West Europe.

DraftKings and FanDuel are the biggest players in the market, combining to make up 90% of all DFS operations worldwide (although their presence is predominantly felt in the US and Canada right now).

Juniper predicted the imminent consolidation of these two brands will eventually form one, superior powerhouse in the daily fantasy sports betting industry. By melding their services, the study projected these two DFS juggernauts will finally dwarf their nearest rival, Yahoo Sports.

Ironically, DraftKings and FanDuel just announced on Friday their intentions to merge. The deal is expected be completed and the merger finalized by the second half of 2017.

Alternative Strategies For Market Growth

Foye wrote that DraftKings and FanDuel’s aggressive marketing campaigns – as successful as they were in drawing new customers – were a mistake in terms of revenue growth. They may have bitten off more than they can chew by spending hundreds of millions of dollars on ad campaigns, while promoting multi-million dollar guaranteed prize pools. Simply put, the more your spend, the less you make in profit.

It doesn’t help that there’s a stigma over the DFS market that’s driving casual players away. Foye said operators “will need to quell suggestions that only 10% of ‘professional’ players win the monetary prizes on offer.”

Juniper suggested that this can be achieved by heavily promoting private leagues, wherein players can join a private group of friends to compete against, rather than worrying about so-called pros taking every pot.

High-spending pros are great for an operator’s revenue. However, it’s no secret that attracting an abundance of casual players with smaller prize-pool contests is the real bread and butter of any online betting operation (as has been evident in the online poker industry in recent years).