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Projections Slashed For Daily Fantasy Sports Market

Entry Fee Revenue Was $3.26B In 2016: Report

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Though they did agree to a merger, last year wasn’t great for DFS giants DraftKings and FanDuel, which still control more than 90 percent of the market for the contests.

Yahoo Finance reports that a new research report from Eilers & Krejcik Gaming has dramatically cut the forecast for the industry. Eilers & Krejcik found that DFS revenue grew by about four percent last year to about $3.26 billion. The companies still aren’t profitable, however.

Revenue for 2016 had previously been projected at more than $4 billion. The market is projected to be $4.8 billion in 2020, down from a prior estimation of about $8 billion.

The two companies have historically spent lavishly on advertising and have had hefty legal expenses thanks to a handful of states challenging the legality of the contests. The merger, which still needs regulatory approval, is expected to help solve both issues.

Growth has slowed because the customer base for DFS isn’t evolving. It’s still mostly white males, age 25-35, according to the report. Season-long fantasy still has a much broader appeal, with more than five times the estimated number of players than DFS.

Nearly 60 million people played season-long fantasy in 2016.

DFS has been explicitly legalized in about 10 U.S. states thanks state lawmakers from across the country questioning how the skill-based games fit in with existing gambling law.