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FanDuel’s outperformance in same-game parlays (SGPs), and the associated higher sportsbook margins, continue to drive the brand’s dominance in the US online sports betting sector in 2024.

That’s according to the latest Sports Betting Market Monitor report from Eilers & Krejcik Gaming (EKG).

The report includes several key data points and analysis from the US sports betting market, including market share statistics as well as predictions for the future of the sector.

Below, NEXT.io sets out some of the key talking points from the February edition of the report, using data up to January 2024.

January US market share

The February report offers a first look at market share figures from January 2024, using handle and GGR data from New York, Indiana, Iowa, Maryland, Kansas and Massachusetts.

The picture is a fairly familiar one, with FanDuel and DraftKings together accounting for 77% of overall betting handle and 85% of total GGR.

The differences in market share when comparing handle to GGR, however, help to demonstrate the power of FanDuel’s superior margins, driven by the popularity of its SGP offering.

The Flutter Entertainment-owned brand was able to generate 48% of GGR despite handling just 40% of the total betting volume, making it the only brand with a higher proportion of GGR than betting handle.

DraftKings, meanwhile, generated 37% of market GGR from handling 37% of betting volume. BetMGM’s handle and GGR figures also matched up in January, as it accounted for just 6% of each.

Still, that left the brand in third place by share of GGR, despite Caesars handling a higher proportion of bets, as it accounted for around 8% of betting handle across the analysed states.

Despite its 8% share of handle, the casino giant accounted for just 5% of overall GGR.

For Penn Entertainment-powered newcomer ESPN Bet, the figures were even more stark as it experienced high promotional costs in its launch phase.

While rapid customer acquisition led the brand to handle around 4% of all betting volume across the analysed states in January, it managed to generate just 1% of overall GGR, as the high cost of signing up customers hit the new brand’s hold rate hard.

BetRivers also managed to generate 1% of GGR from 2% of handle, while all other brands put together generated just 2% of GGR, from around 3% of the total betting handle.

Hold rates by operator

The reason for FanDuel’s outstanding conversion of handle to GGR can be seen in the above graphic, which compares the online sports betting gross hold rates of the four market-leading brands between 2022 and 2023.

While the chart shows significant natural variance over time, FanDuel has consistently outperformed its competitors, regularly generating hold rates of above 12% and reaching as high as 14% at certain points.

Meanwhile, DraftKings has consistently generated a hold rate of between 6% and 10% over the past year, and exceeded 10% only by a small margin for just two very brief periods.

Although it holds a smaller percentage of the overall market, BetMGM has demonstrated a consistently higher hold rate than DraftKings for much of the last two years, having reached further above 10% for longer periods than its competitor.

As of the end of the reported period, however, DraftKings remained in second place with a hold rate in the region of 9.5%, while BetMGM’s hold rate remained closer to around 8.5%.

Elsewhere, Caesars has been by far the worst performing brand of the four by hold rate over the past year, as it hovered consistently between 4% and 8%. As of the end of the reported period, the brand’s hold rate sits at just over 6%.

That leaves the firm well short of the trailing 12-month market average hold rate of 8.87%.

SGPs trending upwards

Hold rates across the market ought to be improving in US sports betting, given a steady increase in SGPs as a proportion of the overall betting market.

The above chart shows a continued average improvement in the proportion of GGR earnt from SGPs in recent years, from less than 40% in September 2018 to over 60% in November 2023.

That improvement has come in spite of SGPs as a proportion of betting handle rising more modestly from under 20% to around 25% over the same period.

That phenomenon can be explained by a continued increase in the average hold percentage of SGPs, to as high as 20% by November 2023.

That clearly puts the product head and shoulders above regular betting markets in terms of its profitability.

Elsewhere, the February Market Monitor shows the extent to which FanDuel dominates the market for SGPs specifically.

A detailed analysis of the Illinois market shows that the operator took 54.4% of all SGP bets in the state over the trailing 12-month period, with a total of more than 106 million SGPs placed on FanDuel.

It is worth noting that the figure represented a smaller percentage of all SGPs than in the previous 12 months, when FanDuel took 61.8% of all parlays, which suggests that other operators are beginning to catch up with the firm, which has until now benefitted from a significant first mover advantage on SGPs.

For example, DraftKings took 34.2% of SGPs in Illinois over the trailing 12 months, compared to 29.5% in the previous 12 months.

No other operator came close to the market leaders in terms of the proportion of SGPs they took, with only BetRivers taking more than 3% of all parlays.

Also worth noting is FanDuel’s outstanding parlay hold percentage, which came to 21.28% in Illinois over the trailing 12 months. 

No other operator came close, although PointsBet’s 17.52% hold rate, BetRivers’ 16.87% and DraftKings’ 15.14% also meant parlays were a significantly more profitable business for them than traditional wagers.

EKG’s monthly report provides a digest of news and data points, including forecasts, for the emerging market for regulated sports betting in the United States. Please contact managing director Chris Krafcik for more information.

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