Online sports betting is not for the faint of heart, says FanDuel CEOs as Disney and Fanatics pose threats.

• The legalization of sports betting by the Supreme Court five years ago has resulted in it becoming a multi-billion dollar business in the U.S.
• The online sports gambling industry is still developing, but the high barriers to entry for competitors make it difficult for new players to enter the market.
• The first U.S. operator to achieve EBITDA profitability for the full year is expected by her.

Since the U.S. Supreme Court allowed states to legalize sports betting five years ago, over $220 billion has been wagered at legal gambling outlets, with this amount continuing to increase as more states legalize betting. Currently, 35 states and Washington, D.C. have legal sports betting, as stated by the American Gaming Association.

FanDuel and have benefited greatly from the industry's continued growth, holding more than 80% of the U.S. sports betting market. Meanwhile, other major players such as and have attempted to establish their own unique positions in the market.

Despite the competitive sports betting market, major companies involved in sports are attempting to gain a share. In August, ESPN launched ESPN Bet in partnership with . Fanatics, founded by Michael Rubin, acquired the U.S. operations of PointsBet after a long pursuit to enter the sports betting market.

Amy Howe, CEO of FanDuel, stated during a virtual summit that while she anticipates an increase in well-funded and robust competitors in the sports betting industry, there are specific reasons why other major players have not been successful.

To succeed in the industry, it is crucial to have both a superior product experience and scale, as stated by Howe, who joined FanDuel in 2021.

FanDuel, a subsidiary of Flutter Entertainment, operates in all 50 states and has partnerships with leagues such as the NFL, NBA, MLB, and NHL, as well as with teams, broadcast companies, and NFL Sunday Ticket's acquirer.

"Like any ecommerce business, we're in the early stages and competing for attention. We're also working to ensure that we can safely bring the best consumers to our platform through long-established partnerships," Howe stated.

On Thursday, DraftKings reported a 57% increase in quarterly revenue and declining losses.

According to Howe, the company anticipates achieving profitability on an EBITDA basis throughout the year, marking a first for U.S. operators. This accomplishment will aid the company in maintaining its competitive edge in the market.

The barriers to entry in online sports betting are high, requiring licensing and navigating a complex regulatory environment. Additionally, there are significant costs associated with creating a great product and technology platform. Furthermore, there is a need to spend a lot of money on responsible consumer marketing.

If you have a low single-digit share and lack the scale advantage, it becomes increasingly difficult to reinvest in meeting consumer demands, as it is not for the faint of heart.

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