DraftKings vs FanDuel: How Two Daily-Fantasy Apps Became the Largest US Sportsbooks
DraftKings and FanDuel started as daily fantasy sports apps in 2012. By 2024 they were the two largest US sportsbooks, with 70%+ combined market share. The story of how they got there.
DraftKings and FanDuel are the two most prominent names in US online sports betting in 2026. But neither company started as a sportsbook. Both pivoted from daily fantasy sports — and both came close to dying in 2015 before the 2018 PASPA repeal saved them.
The DFS origin — 2012-2015
Daily fantasy sports (DFS) is a contest format where players draft a virtual team of real athletes, with prizes paid based on actual on-field performance. Unlike season-long fantasy, DFS resolves in a single day or weekend.
The legal theory: DFS is a "skill game" rather than gambling, exempting it from state gambling laws. The 2006 federal Unlawful Internet Gambling Enforcement Act (UIGEA) carved out an exception for fantasy sports.
DraftKings (Boston, 2012) and FanDuel (NYC, 2009) became the two dominant DFS operators. By 2015 both were valued at $1B+.
The 2015 New York crisis
In November 2015, NY Attorney General Eric Schneiderman declared DFS to be illegal gambling in New York. He ordered DraftKings and FanDuel to cease operations in NY (then their largest market).
The companies fought in court. The case was settled in 2016 when NY passed legislation explicitly legalizing DFS. But the existential threat was real — the AG action could have been replicated by 49 other state AGs.
The crisis forced consolidation discussions. DraftKings and FanDuel announced a merger in 2016, but the FTC blocked it on antitrust grounds in 2017.
The 2018 PASPA repeal — the inflection point
In May 2018 the Supreme Court ruled in Murphy v. NCAA that the federal Professional and Amateur Sports Protection Act (PASPA) was unconstitutional. States could now legalize sports betting individually.
Within months, multiple states (NJ, PA, WV, MS, NM) had legal sports betting. The DFS infrastructure DraftKings and FanDuel had built — user accounts, payment processing, brand recognition, regulatory experience — was perfectly transferable to sports betting.
By 2019 DraftKings had launched a sportsbook in NJ. By 2024 it operated in 25+ states.
DraftKings's IPO — 2020
In April 2020 DraftKings went public via a SPAC merger at a $3.3B valuation. By March 2021 the stock had peaked at $74/share ($30B market cap). It later corrected and trades today around $35-40/share ($15B market cap).
DraftKings's growth has been driven by:
- Aggressive market entry in newly-legalized states
- Heavy advertising spend (~$500M annually)
- Partnerships with sports leagues (NFL, MLB, NBA)
- Acquisitions (Golden Nugget Online, etc.)
FanDuel's path — Flutter ownership
FanDuel was acquired in 2018 by Paddy Power Betfair, a UK-listed gambling conglomerate that later renamed itself Flutter Entertainment. Flutter is the parent company of:
- FanDuel (US sports betting + DFS)
- Paddy Power (UK/Ireland betting)
- Betfair (UK betting exchange)
- PokerStars (online poker)
Flutter's market cap is ~$30B+. FanDuel as a US operation is the most valuable Flutter asset.
Current market position
In 2026:
The combined FanDuel + DraftKings market share is ~70%. The market structure is essentially a duopoly.
The DFS-to-sports-betting pivot is one of the most successful business model transitions in modern American business. DraftKings and FanDuel built sports-betting infrastructure on top of DFS user bases that were already conditioned to make in-app sports wagers. They were ready when PASPA fell. Their casino-affiliated competitors (Caesars, MGM) were caught flat-footed.
What this means for players
For most US sports bettors:
- FanDuel and DraftKings have the deepest markets, fastest payouts, best app UX
- Caesars Sportsbook has the strongest casino-comp integration (Caesars Rewards tier credits from sports bets)
- BetMGM has the best MGM Rewards integration
For new account opening: DraftKings and FanDuel offer the most aggressive welcome bonuses ($100-1,000 deposit match plus risk-free first bets).
For our take on the broader sports betting effect on casinos: how legal sports betting saved regional casinos.
Topics
- draftkings
- fanduel
- sports-betting
- industry