While DraftKings’ arrival on Canadian shores had an air of inevitability when Ontario opened the front doors on 4 April, the timing of its arrival seems to be run by a different algorithm to the rest of the field.
FanDuel, DraftKings’ biggest competitor, came straight out the blocks on 4 April alongside a string of other US heavy hitters; BetMGM, Caesars Sportbook and LeoVegas all included.
In nearly all US markets, FanDuel pips DraftKings to market domination. FanDuel claimed between 30% and 40% of the US market for Q4 2021 compared to DraftKings, which amassed a share between 20% and 30%. FanDuel also ruled download shares with 38% as DraftKings came in second with 22% of the market.
So, when New York went live with mobile sports betting in January this year, betting may as well have been suspended on who would lead the market after a month; FanDuel rose to the top with a market share of 51%, up 27% on DraftKings.
It’s worth noting that when New York’s market went live, DraftKings came rushing out with the rest of the pack, only to fall into the same pattern of being best-of-the-rest once again.
There was nothing odd in this though, DraftKings typically likes to get an early foot in the door. When Connecticut went live on 19 October 2021, DraftKings was there; when Michigan went live in January 2021, DraftKings was there; the list goes on.
The natural question to ask is why now for DraftKings? Ontario has been an active market for over a month. Of course, going live in Ontario does pose a very different host of regulatory compliance laws for operators, but none of this slowed DraftKings’ competitors.
One would not be remiss to infer a change of tact from DraftKings as it looks to reach top spot in the region.
DraftKings’ CFO, Jason Park, recently attributed the company’s launch delay “to the presence of grey-market operators, many of which have been present in Ontario for several years.”
"FanDuel claimed between 30% and 40% of the US market for Q4 2021 compared to DraftKings, which amassed a share between 20% and 30%. FanDuel also ruled download shares with 38% as DraftKings came in second with 22% of the market"
He continued: “We do not believe that the timing of our launch will have any impact on the share we are able to achieve in that province.”
So, it may be that DraftKings is adopting a longer-term strategy; the operator forecasts “minimal net revenue” for all of 2023 as well as 2022.
This may come to pass, but it’s hard to gauge what DraftKings expects its Ontario market share to be in the long run. Although data is so far limited, it’s not FanDuel with the early dominance in Ontario.
Penn National-owned theScore Bet led Ontario’s application download shares in April, with 33%. Making its name as a media and sports data platform, the company moved into the online sports betting vertical when Ontario launched on 4 April.
In fact, its closest established competitor for the healthiest share of downloads was BetMGM, while FanDuel – DraftKings’ usual adversary – had just a 16% share of the download space.
DraftKings’ delayed market entry could, therefore, give the operator a unique opportunity, to analyse the market strengths and failings of its competitors and use this knowledge to gain an advantage.
This will be difficult, though, particularly when up against native brands (theScore Bet) with entrenched local identities.
So, what must DraftKings do to dominate this new market? It will certainly need to adapt its operating structure to adhere to regulations set out by the Alcohol and Gaming Commission of Ontario (AGCO).
BetMGM has already been fined CA$78,000 ($60,858) by AGCO for breaching standard 2.04 – misrepresenting products in its promotions and advertisements. So, DraftKings will need to avoid promoting the big offers which have come to prominence in US markets.
And with different countries come different interests. DraftKings will need to localise its offering for popular sports in the region such as curling. Ontario’s Curling Association (CurlON) has been established since 1874, so tapping into these local, historical staples will be critical to DraftKings’ success in Ontario.
There’s every chance DraftKings can become a king in Canada, although with current market forecasts, this may not be for a few years yet.
