There are two clear leaders in the sports betting market in Maryland: DraftKings and FanDuel. Those two behemoths have accumulated more than 80% of the market share in the state. Is there a competitor out there that can chew into that sizable lead?
Per reports from the Maryland Lottery & Gaming Control Agency, in June DraftKings and FanDuel sportsbooks had 81% of the total handle (wagers accepted) at Maryland online sportsbooks.
While one of out of every five dollars bet are still placed with sportsbooks other than those two leaders, the situation represents a quasi-monopoly of sorts.
DraftKings and FanDuel are the market leaders in many other states across the map of the United States. But their combined share in Maryland is unprecedented. What does that mean for Maryland sports bettors? What does it mean for the future of sports betting in the state? And can any sports betting operator mount a challenge to topple one of “the big two?”
Possible challengers to DraftKings, FanDuel in Maryland
Starting from the first full month of legal sports betting in Maryland (December 2022), both FanDuel Maryland and DraftKings MD have been at the top in terms of total handle. That month, the two combined for $394 million of the $478 million in wagers accepted, with FanDuel in the pole position.
Thus far, FanDuel has reported $1.275 billion in total handle in Maryland, with DraftKings at $868 million. That’s roughly $2.14 billion (81%) out of the $2.64 billion for the entire state historically.
The trend is steady: total handle for Maryland online sportsbooks overall was $243.8 million in June 2023, and $197.7 million (78%) of that came from DraftKings and FanDuel.
Can anyone inch close to the two leaders? BetMGM Sportsbook Maryland has been in the No. 3 spot most months, based on total handle. But their total of $245.9 million in total handle is more than $620 million behind DraftKings.
A newcomer could whittle away at the big boys in MD online sports betting: Fanatics Sportsbook debuted last month, making it’s debut in the industry. Fanatics posted a 0.6% market share in June, on $1.6 million in total handle. FanDuel accepted that many bets every 11 hours in June.
Fanatics has the cash to fight a battle with DraftKings and FanDuel. The company has expressed interest in being an innovator, which could differentiate it from the field of sports betting operators. It’s also purchased PointsBet, which has accumulated about 1.1% of the market in MD. Those figures should rise as Fanatics gains brand awareness and spends on promotions to lure new customers.
We may also see an unknown name enter the sports betting market. There has been speculation that ESPN, owned by Disney, could leverage its popular brand to launch a sports betting app. But there’s been no indication that will happen.
FanDuel and DraftKings, helped in large part by their immensely popular daily fantasy sports products that predate the legal sports betting industry, are dominating the market in Maryland and many other states.
What market dominance means to Maryland sports bettors
Most markets undergo a growth phase, followed often by a shuffling of competition. Some brands may choose to leave a market because it’s too costly. Others are acquired or merge with competitors. We are seeing some of that occur in the sports betting industry. Last year MaximBet shut down, and earlier this year Fubo exited the market, citing costs and strategic failures. Earlier this year, PointsBet agreed to sell its U.S. sports betting interests to Fanatics.
As we have previously seen in the tech and media industries, as well as healthcare, there will likely be a thinning of the sportsbook options available to consumers. That can be a good thing, as supply and demand level off and prices settle, or it can be bad if the remaining operators can dominate the market and choose not to innovate.
Maryland bettors could ironically see fewer advertisements for sports betting if the market sees dominance from a few brands. Lesser brands could drop out, or be acquired. DraftKings and FanDuel may see less need to offer expensive promotional play when they already have sizable market share. The two giants could settle in as co-market leaders. Sort of how Coke needs Pepsi, and McDonald’s needs Burger King.
DraftKings and FanDuel combined total handle market share, lifetime
Here’s the combined market share for FanDuel and DraftKings in some other legal sports betting states. In all of these states, FanDuel is in the top position for total handle, unless noted here.
- Arizona … 64.4% (DraftKings in #1 spot)
- Illinois … 60.4% (DraftKings in #1 spot)
- Maryland … 81.0%
- Massachusetts … 83% (DraftKings in #1 spot)
- Michigan … 53.5%
- New Jersey … 67%
- New York … 51%
- Ohio … 72.5%
- Pennsylvania … 60.7%
In the states where the lifetime market share (by total handle) of FanDuel/DraftKings is below 60%: in Michigan BetMGM is third and has 22%; in New York, Caesars has carved out about 13% of the market.
SOURCES: PlayMichigan, PlayNJ, NY Sports Day, PlayMA, PlayOhio, PlayIllinois, ArizonaCasinos, PlayPennsylvania.
