Since hitting a high-water mark on Oct. 11, entry fees in DFS guaranteed contests have been receding quickly. Data supplied by SuperLobby.com shows that entry fees in NFL GPPs are down 14 and 11 percent over the last three weeks for DraftKings and FanDuel, respectively.
But when information from non-guaranteed contests—cash games—is included, a different picture emerges. With cash game entry fees included, FanDuel’s gross revenue from NFL contests is up slightly since Oct. 11, despite dipping about three percent last weekend.
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Cash game information isn’t available from DraftKings, which remains the leader in NFL GPPs, but at least at FanDuel, the data from SuperLobby’s midseason report tells the story not of an industry in decline, but one undergoing a shift in identity.
Guaranteed contests are the marquee events for daily fantasy operators. They’re the “big-check” events that make the national ad campaigns, and they generate the biggest prize pools and the most entries. But the (albeit abbreviated) evidence from the current NFL season shows that player preferences might be shifting.
In Week 2 of the NFL season, 63 percent of FanDuel’s revenue was generated by GPPs. Last weekend, that number was at 47 percent, marking the second consecutive week cash games accounted for more than 50 percent of gross revenues.
It’s too early to draw far-reaching conclusions from these numbers. They’re essentially a six-week snap shot, taken during one of the most tumultuous periods in the industry’s brief history. FanDuel CEO Nigel Eccles said this week that NFL action on this site typically slides a bit at this time of year, and there’s no week-to-week, year-over-year data that we could find for comparison. SuperLobby only began tracking these figures this season and its reports have grown more robust during the last two months.
But for whatever reason, whether cyclical or scandal-driven, it’s at least clear that for the time being, GPPs are shrinking in the most tangible way. FanDuel has reduced the guaranteed prize pool for its largest NFL contests from $5 million to $3 million since Week 1, DraftKings is down from $10 million to $6 million, and No. 3 operator Yahoo has cut its former “$1 Million Baller” in half.
Whether that’s a harbinger of bad times for the industry, or simply an indication of changing player preferences is yet to be determined.