‘Customer-friendly’ NFL season highlights risk for sports betting companies

The football season has proven to be a challenging one for sports books, with both FanDuel and DraftKings experiencing higher than expected losses. Flutter Entertainment, the parent company of FanDuel, disclosed that the latest NFL season has been particularly favorable to bettors, leading to a significant decrease in revenue. The company estimates that they lost around $390 million from November to December due to more payouts to bettors.

DraftKings also reported similar challenges in November, attributing it to more payouts to bettors. As the NFL playoffs approach, both companies are gearing up for a busy weekend of games, with the Los Angeles Chargers, Baltimore Ravens, Minnesota Vikings, Philadelphia Eagles, and Buffalo Bills being the favored teams according to BetMGM.

Despite the short-term volatility in the sports betting industry, investors have become more accustomed to the fluctuations that come with the business. Commercial sports betting revenue in the U.S. has been on the rise, reaching nearly $11.1 billion through October in 2024, a 27% increase from the same period in 2023.

The legalization of sports gambling in the U.S. has paved the way for companies like FanDuel and DraftKings to establish themselves as major players in the industry. With partnerships with major sports leagues like the NFL and MLB, these companies have been able to tap into a growing market of sports fans looking to engage with betting.

Both Flutter and DraftKings have been investing heavily in sales and marketing to drive growth and expand their reach. While Flutter has a larger international presence, DraftKings has been focusing on the U.S. market, with revenue increasing significantly in recent years.

The rise of sports betting has also benefited sports leagues and broadcasters, as companies like DraftKings and Flutter increase advertising spending. Higher viewership is also expected as more bettors tune in to watch games they have placed wagers on.

Overall, the sports betting industry is experiencing rapid growth and expansion, with more states legalizing online sports books and increased awareness among consumers. As partnerships continue to grow and demand for sports betting rises, companies like FanDuel and DraftKings are poised to capitalize on this trend and further integrate sports gambling into the viewing experience for fans.