Everywhere you turn, whether it’s daily fantasy sports (DFS) or sports betting, it seems DraftKings just can’t lose.
The company can claim “top dog” status in yet another state when it comes to the DFS industry. Though, it already paces on a nationwide basis.
Year-end numbers for Pennsylvania released by the state’s Gaming Control Board reveal that DK led all operators with just over $7.9 million in revenue.
Draft Kings in the lead, with FanDuel next in line
Primary rival FanDuel unsurprisingly checked in as the runner-up. However, it was as a relatively distant second. FanDuel boosted its bottom line by just over $6.9 million. It’s an impressive figure that nevertheless lags considerably behind DK’s pace-setting number.
Notably, those numbers aren’t true “net” figures. All PA fantasy contests operators doing business in the Keystone State are on the hook for 15 percent of those adjusted revenues in the form of taxes. Consequently, DraftKings forked over nearly $1.2 million to state coffers, while FD’s contributions to the Commonwealth slightly eclipsed $1 million.
A full year-long snapshot of the industry’s profitability for both operators and the state won’t actually be available until this time next year in Pennsylvania. That’s because although the activity was formally legalized when H271 was signed into law by Gov. Tom Wolf in late October 2017, the state’s regulatory structure didn’t go into effect until May 2018.
Taking the truncated time sample, the overall returns generated by the industry offer a reason for optimism. Specifically, DFS’ popularity within the state is far from surprising. Pennsylvania is the sixth-most populous state. Estimates place the number of active, individual DFS players in the state at well over 60,000.
Running down the other DFS operators
Naturally, the roster of active fantasy operators in Pennsylvania extends beyond The Big Two of the DFS industry. Currently, Pennsylvania has seven other companies overall offering fantasy contests within its borders.
With respect to DFS operators, the following are all active in Pennsylvania:
- Sportshub Technologies
- Boom Fantasy
The Fantasy Football Players Championship (FFPC) and Full Time Fantasy Sports, which offer a wide variety of season-long contests, also do business with the state’s residents.
One other entity, Fastpick, was active briefly in Pennsylvania and generated a total of $381.49 in revenue. The company offered a house-banked, non-salary-cap game. Fastpick does continue to offer its game in New Jersey in partnership with Resorts Atlantic City.
Third-place finisher DRAFT is an interesting entrant in its own right. The company now falls under the umbrella of FanDuel. Paddy Power BetFair purchased DRAFT in May 2017 for a reported $48 million.
PPB eventually acquired a controlling stake in FD approximately 12 months later as well in a much more publicized transaction, and DRAFT is now officially marketed as “DRAFT by FanDuel”. However, the operator, which offers daily, weekly and season-long contests, generates revenue that’s recorded separately from FD’s.
Don’t forget about sports betting too
State lawmakers are likely pleased with the early dividends that their efforts to formally legalize fantasy sports have paid. Just under $2.3 million in tax revenue went over an eight-month period. Factored over a full 12-month period, that figure could climb to approximately $3.5 million in 2019.
It bears mentioning fantasy contests aren’t the only form of regulated real-money, sports-based gaming in Pennsylvania. Legalized PA sports betting launched in mid-November. The industry generated over $16 million in handle and over $2 million in revenue during its first full month in December
Due to an elevated 36 percent tax rate on adjusted revenue that dwarfs DFS’ 15 percent figure, the state took in a hefty $722, 356 for that month alone. The fact that only three sportsbooks are active in Pennsylvania – and that online sports betting has yet to debut – means there’s plenty of reason for optimism on that front as well.