Updated Sep 4, 2023 - Economy

Well-funded giants eye online gambling pot

Illustration of someone holding playing cards with different sports balls on them instead of suits.

Illustration: Maura Losch/Axios

As online sports betting booms, Fanatics (most recently valued at $31 billion) and ESPN (the worldwide leader in sports) have taken seats at the increasingly crowded table.

Why it matters: Many have tried and failed to take on the duopoly that leads the $220 billion online sports betting industry, but these two giants could pose a meaningful threat.

What's happening: Fanatics, which launched its own sportsbook in four states earlier this month, is expected to close its $225 million acquisition of PointsBet's U.S. business this week, which will eventually give it access in 16 states.

  • ESPN, meanwhile, entered the space with its $1.5 billion deal with Penn Entertainment that will rebrand Penn's Barstool Sportsbook into ESPN Bet starting in November.

State of play: FanDuel and DraftKings — the undisputed leaders — both got in early and have expanded along with the market.

  • Today, the two account for 82% of the market, with FanDuel owning 47% by itself. The remaining 23% is splintered among traditional gambling names like Caesars and MGM, and myriad startups.
  • Penn and PointsBet currently have around 2% of the market each.
Data: Company reports; Chart: Axios Visuals

Yes, but: The road is littered with the bones of failed sportsbooks that couldn't break the FanDuel-DraftKings duopoly.

  • That list includes MaximBet, Fubo Sportsbook, Churchill Downs and theScore — all of which who closed last year. Fox Bet was also shut down last month.

What they're saying: DraftKings CEO Jason Robins previously told Axios he's not worried about the increased competition:

  • "There has been a consistent influx of new competitors ever since we started. I don't think that the [arrival of Fanatics] affects what we do very much."

By the numbers: More than $220 billion has been wagered on sports in the five years since the Supreme Court's landmark decision. This year alone is expected to see more than $5.18 billion wagered, an increase of 66% from last year.

  • 34 states (plus Washington, D.C.) have live, legal markets, while four states have legalized betting but haven't begun operations.
  • Every major league has official betting partners, and 11 different pro stadiums have or are planning in-venue sportsbooks.
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