As U.S. senators scrutinize sports betting giants FanDuel and DraftKings for potential antitrust violations, challenger brands continue to enter the market. Soft2Bet, a Malta-based iGaming company, has partnered with Caesars Entertainment to launch a mobile sportsbook and iGaming brand in New Jersey this summer. This move coincides with senators Mike Lee (R-Utah) and Peter Welch (D-VT) addressing a December letter to the FTC and DOJ, which alleges that DraftKings and FanDuel engage in “anticompetitive conduct” against other gaming operators.
Soft2Bet’s general counsel, David Yatom, clarified at last week’s NEXT Summit that their intent isn’t to directly compete with the two giants. “While we aren’t aiming to compete head-on with DraftKings and FanDuel, a significant share of the market still remains between these leaders and other operators,” he said.
According to a newsletter by Dustin Gouker, FanDuel and DraftKings accounted for approximately 77% of gross gaming revenue among online sports betting operators across six states in February. BetMGM followed at a distance with 6.9%, while Fanatics, Caesars, and ESPN Bet held 5.14%, 4.17%, and 2.3% respectively.
At the NEXT Summit, when asked if he viewed DraftKings and FanDuel as possessing a “duopoly” in the market, Yatom affirmed: “They pretty much fit that definition. Kudos to them for achieving such market share, but the downside is that their dominance leads to a lack of innovation. I hope some major operators consider partnering with us to enhance their offerings using our own gamification feature.”
Currently, 18 U.S. states have yet to legalize online sports betting, including populous states like California and Texas. Despite the prominence of DraftKings and FanDuel, the offshore gaming brand Bovada remains the most widely used sportsbook in the U.S., according to a new study from research firm Blask and gaming event organizer Next.io.
“There is definitely room for challenger brands as the focus shifts from spending to product-led growth,” stated Meredith McPherron, CEO and managing partner at Drive by DraftKings, during the NEXT Summit. She spoke alongside other industry leaders, emphasizing that despite the heavy market concentration—FanDuel and DraftKings control around 75%—this also opens up opportunities for innovation, particularly through niche markets or demographic targeting.
Legacy brands, including Disney, Fanatics, PENN, and BetMGM, have invested billions to compete against DraftKings and FanDuel. The rise of prediction markets like Kalshi has also attracted interest from financial giants such as Crypto.com and Robinhood, who are exploring adjacent sports betting opportunities.
As PENN and Disney consider their upcoming 2026 opt-out decision regarding their partnership on ESPN Bet, investor Davis Catlin of Discerning Capital suggested that ESPN should consider pivoting from being a brand licensee to an affiliate. “It’s not enough to just partner with PENN because of their reputation; understanding and leveraging your competitive advantage is crucial. If I were ESPN, I’d focus on running as an affiliate,” he advised. “In this industry, knowing your strengths is key to making money.”
