Underdog Fantasy Blasts FanDuel, DraftKings for Wanting a “Monopoly”

Underdog Fantasy sent a scathing rebuke of operators FanDuel and DraftKings, who have attempted to downplay Fantasy Sports sites.

“As you may have seen, the right to play our Fantasy Sports contests has recently come under attack,” Underdog said in a Wednesday release. “The attention is not organic - it's being directly fueled by the companies with a virtual monopoly in sports gaming: FanDuel and DraftKings.”

According to Underdog, the pair, which represent the two largest online sportsbooks in America, are attempting to get rid of competition to increase their already-dominant share of the market.

Fantasy Sports are an alternative to traditional sports betting. Sites such as Underdog, Prize Picks, and recently, Betr (with Betr Picks) allow users to pick “More” or “Less” instead of having to pick from spread, moneylines, totals, or other traditional markets.

For example, a user may not be interested in betting on the outcome of the Kansas City Chiefs-Detroit Lions Week 1 NFL matchup, but would like to bet “More” than 2.5 touchdowns for Patrick Mahomes. Multiple correct picks create higher payout multipliers and lead to great profits for players.

Underdog believes that the development and growth in the Fantasy Sports community is coming to the detriment of FanDuel and DraftKings, which is why they are using “their deep pockets and political muscle to try to influence government officials, and exerting their market power to influence [Underdog’s] business partners.”

“Underdog and other companies innovating in Fantasy Sports and sports betting threaten their monopoly,” said the company’s release. “They've seen our company, and others, produce superior products, more exciting user experiences, and begin to challenge them for sports fans' attention - and they're scared that we will challenge their market positions. We're already bigger than they are in fantasy. Frankly, they should be scared.”

According to market research company Mordor Intelligence, the Fantasy Sports market is expected to grow from $26.98 billion in 2023 to $49.53 billion by 2028, at a Compound annual growth rate (CAGR) of 12.92%.

FanDuel and DraftKings both offer Fantasy Sports on their platforms, but they go about it in different ways. Here, users pick lineups of players that compete that day and earn prizes based on the performances of those players.

Underdog also took exception to FanDuel and DraftKings’ seeming lack of interest in developing a competitive marketplace. Despite holding estimated 45% and 30% shares of the online sports betting market, the fantasy company believes they are attempting to gain bilateral control of the sports betting industry.

“What do monopolists do when they are afraid of competition?” said Underdog’s release. “They use their money, power, and influence to target competitors. That's the playbook FanDuel and DraftKings are following, leaning on backroom lobbyists and pressing business partners to do their dirty work for them. It's a classic play for entrenched big businesses who are afraid of competition.”

Competition is an unavoidable reality for all competitors in the sports betting industry. Despite several major companies withdrawing from the market, platforms such as Fanatics sportsbook and the newly-announced ESPN Bet are going to take huge swings at gaining market control as they launch and go live.

There also appears to be a realignment occurring within the market as FanDuel and DraftKings consolidated their positions atop the board, while Caesars slipped down to an estimated 6% share of the market. That means that there could be opportunities for any of the previously-mentioned companies to leap into the spotlight, or at least provide a viable alternative to the top operators.
 
Underdog concludes its release by stating that it and other fantasy sites meet the legal requirements, and that they are not going away.

FanDuel and DraftKings have not provided any comment on the matter.