The fantasy sports market in America is poised for continued growth.
The U.S. fantasy sports market, which is led by major operators FanDuel and DraftKings, is expected to be valued at roughly $6.87 billion by 2028 — up from $3.4 billion in 2022, according to ResearchAndMarkets.com. The projected growth considers the increase in popularity of fantasy sports amongst Gen Z and millennials in the U.S. behind an uptick in interest in augmented reality and virtual reality. The fantasy sports market is also expected to benefit from an influx of strategic partnerships and acquisitions that operators are using to leverage growth.
The operators looking to take advantage of fantasy sports’ estimated compound annual growth rate of 12% in the U.S. include DraftKings and FanDuel. The group also includes emerging platforms, including Sleeper and The Huddle.
As fantasy sports continue to grow in the U.S., these platforms will look to carve out a favorable market share behind unique offerings and opportunities for new and returning customers.
Rule changes
The projected growth of daily fantasy sports in the U.S. comes amid recent controversy.
Florida gaming regulators ordered fantasy sports operators in September to temporarily cease operations after they received information that the operators “may be offering or accepting illegal bets or wagers from Florida residents.” Ohio regulators took notice of the move and also decided to prohibit the Pick’em style fantasy contests while Michigan took a different approach.
In October, the Michigan Gaming Control Board put into place new administrative rules for fantasy sports contests that ensure fair play. The new rules ban contests “that involve, result in, or have the effect of mimicking betting on sports.” The updated guidelines led PrizePicks to debut a new free-to-play game in Michigan after previously announcing an exit from the state.
California lawmakers have also voiced their concerns over fantasy sports. Last month, the state’s Attorney General’s Office announced plans to prepare a formal opinion concerning the legality of fantasy sports in the state, per Vixio GamblingCompliance. The opinion follows a request in October 2023 by Republican Senator and former minority leader Scott Wilk. California residents currently have access to daily fantasy sports contests via operators.
The state offers daily fantasy sports contests that are unregulated but not considered illegal.
