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After playing second fiddle to FanDuel since sports betting became legal, DraftKings has finally surpassed its longtime rival.
After playing second fiddle to FanDuel since sports betting became legal, DraftKings has finally surpassed its longtime rival. Photo illustration by Scott Olson/Getty Images via AFP.

It took some time and patience, but DraftKings recently celebrated leapfrogging longtime foe FanDuel as the most popular of the best sports betting apps.

In a Quarter 3 earnings call late last week, DraftKings announced it reached about a 31% revenue market share, which would supplant FanDuel as the best of the best sportsbooks in the U.S. market. Meanwhile, FanDuel's market share fell to 30%.

A very strong three-month period ending Sept. 30 played a huge role in DraftKings' accomplishment.

“Our fantastic third-quarter results demonstrate the positive impact of our product and technology investments as well as excellent preparation and execution by our entire organization,” said CEO Jason Robins. “Our new and differentiated features and functionality have created an exceptional user experience that sustains engagement for our mobile sports betting and iGaming customers.”

The Q3 findings

The latest quarterly report for DraftKings exceeded analysts' expectations during this time of intense competition within the U.S. iGaming industry.

DraftKings was able to generate $790 million in revenue for the third quarter, which represents a 57% year-over-year increase from the $502 million during Q3 of 2022.

London Stock Exchange Group took a deep dive into the projected numbers for the sports betting provider and found $706.8 million to be the expected earnings number.

DraftKings' expansion during the third quarter, particularly to Kentucky sports betting, led to the growth.

The number of monthly unique players also experienced a year-over-year increase. DraftKings reported 2.3 million monthly unique payers for Q3, a 40% increase from the same three-month period last year.

Average revenue per monthly unique player came in at $114 in the third quarter, representing a 14% increase from the same period last year.

Results of the findings

The better-than-expected Q3 revenue figures have allowed the company to raise its full-year projections. Before the release of its Q3 numbers, DraftKings' revenue guidance for the full year was $3.46 billion to $3.54 billion. Now, it's $3.67 billion to $3.72 billion.

Company EBITDA (earnings before interest, taxes, depreciation, and amortization) also experienced an impressive spike. DraftKings' EBITDA was around $95 million to $115 million, and it now sits at $190 million to $220 million.

Following the release of its Q3 figures, DraftKings' share price increased 7%, and as of Friday morning, it's trading at just over $31 per share.

ESPN Bet and Fanatics are coming

Though overtaking FanDuel as the leader in the U.S. market is certainly something to celebrate, new threats are emerging.

ESPN BET goes live on Nov. 14, and many sports bettors and industry analysts are expecting it to make a big splash. Odds Assist surveyed 1,000 American bettors - 54% of whom said that they were willing to give ESPN BET a shot. Around 46% of those surveyed said they felt that ESPN Bet would eventually become the market leader in America.

Fanatics, the wildly popular branded clothing distributor has been slowly taking over PointsBet's U.S. presence and has both the database of customers and an incredible reach that is somewhat unique in the U.S. scene.

It's not lost on analysts, or the company itself, that DraftKings is an elite player in 23 states around the country, including two new jurisdictions of Kentucky sports betting and now Maine sports betting.

Its ascension to the top has not been a fluke. DraftKings, with its expansion plans and commitment to remaining one of the best sports betting sites in the American market, will be tough to unseat.