Black Swans And Robert Frost

FanDuel and DraftKings are dominating US sports betting, but that doesn't mean the race is over. If online gambling has taught us anything, it's that change is as certain as death and taxes.

Nothing Gold Can Stay

by Robert Frost

Nature’s first green is gold, Her hardest hue to hold. Her early leaf’s a flower; But only so an hour. Then leaf subsides to leaf. So Eden sank to grief, So dawn goes down to day. Nothing gold can stay.

Many people believe the battle for US sports betting has already been fought and won. FanDuel and DraftKings occupy the head and the foot of the table, while everyone else is simply hoping not to be relegated to the kid’s table.

They may be correct. FanDuel and DraftKings have dominated the US sports betting landscape from the beginning, so the status quo, with some jockeying for position behind the leaders, is certainly one possibility. But I’ve seen this movie before. The online gambling industry turns on a dime and can undergo radical change in the space of a couple of years.

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Déjà vu All Over Again

Every online poker player understands that nothing gold can stay before leaf subsides to leaf. Less poetically, there is always another operator ready to take over, whether it’s complacency from the top dogs, a force majeure, or a new entrant disrupting the space. 

• In 1999, Planet Poker was the only place to play poker online.

• By 2001, everyone knew Paradise Poker was the best place to play online poker.

• By 2003, Paradise Poker’s star was fading, and new online poker sites were the talk of the town. Party Poker, Ultimate Bet, and PokerStars, to name but a few. 

• By 2007, Party was out of the US market (thanks, UIGEA), and PokerStars had a new rival in the form of Full Tilt Poker.

• In 2011, Full Tilt Poker and UB (nee Ultimate Bet) were exposed by the Black Friday crackdown, and only PokerStars remained, making Stars the victor and seemingly unable to be dethroned. *I’ll ignore UB’s scandal-plagued history.

• In 2013, everyone knew US legalization would usher in a new golden era of poker, and everyone knew PokerStars would get a new rival, like the upstart Ultimate Poker.

That never came to pass. Online poker stalled in the US, and Ultimate Poker was offline a year later. Instead, PokerStars has been supplanted by GG Poker, a company that didn’t exist in 2013 and was barely on the radar in 2017.

Source: PokerScout.com

The point is that things move really fast in the online gambling space, and what we know now may not be true just a couple of years from now.

Whether it’s the natural order, black swan events like UIGEA and Black Friday, or the proliferation of online casino and poker, thinking the current hierarchy will remain intact is foolhardy. 

The Second Wave of US Sports Betting

Circling back to the opening paragraph, the US sports betting landscape is about to get very interesting, as there are several new entrants coming, each with the potential to disrupt the current hierarchy (seen in the chart below).