Pennsylvania Fantasy Sports

Revenue in the four-month-old daily fantasy sports market in Pennsylvania returned to sequential growth in August 2018. In total, licensed operators reported $944k in revenue, an increase on the $878k reported in July.

The US sports industry is now entering its busy period, with the NFL 2018-19 season officially having gotten underway on September 6, followed by the NBA and NHL seasons starting next month. Revenue can be expected to trend up until at least Christmas.

Between the big two, DraftKings was the clear winner in August in terms of revenue, generating $502k compared to $425k at FanDuel. It is the third month that DraftKings has led the market and by far the largest gap it has enjoyed since the market opened in May.

FanDuel actually saw its revenue decline fractionally from July to August, bucking an overall industry trend. However, the amount of entry fees it took in grew significantly. Indeed, by entry fees, FanDuel is now leading the market: It took in $4.8 million of the $10.2 million (48%) that Pennsylvanians wagered last month, compared to 4.7% million at DraftKings.

The operator proportionally returned more to players in August than in previous months, with its margin dropped to a low of 8.8% (historically the big two enjoy margins of approximately 10%). This suggests FanDuel has chosen to invest more into building its market share as the industry embarks on a new season as well as expanda into sports betting.

The small operators all saw ticks upwards last month: Yahoo, FantasyDraft and Star Street all saw gains in both total entry fees and revenue in August, though not to any levels that really moved the needle of the market overall. Yahoo and FantasyDraft continue to return almost all entry fees back to players, keeping their gross profit margin to 0.6% and 2.6% respectively.