The US sports betting market continues to experience rapid growth, with DraftKings and FanDuel solidifying their dominance. According to Morgan Stanley's third biannual sports betting survey, conducted in October 2024, rising participation and larger bets across various demographics are fueling this momentum. Notably, the increasing popularity of parlays among younger bettors highlights the sector's promising growth potential. The survey also reveals a consolidation of market share, driven primarily by ease of app usage, a key factor for nearly half of the respondents.

Sports Betting Participation on the Rise

Significant Growth in Bet Size and Frequency: The survey found that participation rates, frequency of betting, and average bet sizes are increasing across all demographics. The survey sampled 3,000 respondents and revealed that 47% of bettors place at least three bets weekly, underscoring the market's sustained momentum.

Demographics Driving Growth: Younger bettors in the 21-34 age group are a vital segment, with 60% placing three or more bets weekly, significantly higher than the overall average. Their average bet size of $58 surpasses the market average of $49.50, positioning them as a key driver of industry growth.

Demographic Insights: Income, Gender, and Age Trends

Income-Based Betting Trends: Bettors with annual incomes between $50,000 and $99,000 bet the most frequently, with 48% placing bets weekly and 16% wagering daily. These trends were consistent across all income levels.

Gender Differences in Betting Behavior: Women, who account for 32% of the market, tend to place slightly larger bets, averaging $51.10 per wager, compared to $48.60 for men. While this represents a dip from the 2022 survey, the percentage of women bettors has increased significantly from 21% in 2020.

Older Bettors' Preferences: Bettors aged 65 and older wager the smallest amounts, averaging $31 per bet. This highlights a divergence in behavior between older and younger participants.

Market Leaders: DraftKings and FanDuel Maintain Dominance

Consistent Market Leadership: DraftKings and FanDuel remain at the forefront of the US sports betting market, leveraging user-friendly platforms and robust marketing strategies to retain their top positions.

BetMGM's Market Share Gains: BetMGM achieved the most significant market share growth, showcasing effective strategies in attracting bettors and expanding its footprint.

Challenges for Fanatics and ESPN Bet: While emerging players like Fanatics and ESPN Bet are gaining traction, Morgan Stanley's survey highlights hurdles in their path. Their users prioritize bonuses and price promotions, potentially impacting net gaming revenue (NGR) growth over the long term.

The Role of Parlays and Ease of Use

Parlay Bets Among Younger Audiences: The survey underscores the growing appeal of parlays, especially among younger bettors, as they seek higher potential payouts and exciting betting experiences.

Ease of Use as a Key Differentiator: Nearly 50% of respondents cited ease of app use as the most critical factor in their choice of platform. This trend underscores the importance of seamless user experiences in driving customer retention and market share consolidation.

Strategic Takeaways for Emerging and Established Players

Growth Opportunities in Women’s Segment: While women's participation dipped slightly since 2022, the market remains far larger than in 2020, offering significant opportunities for targeted engagement and growth.

Focus on Value Beyond Promotions: For newer players like Fanatics and ESPN Bet, balancing bonus-centric strategies with long-term customer loyalty initiatives is crucial to improving NGR share.

Maintaining Innovation and Engagement: Established leaders must continue innovating to meet evolving user preferences, particularly as new entrants increase competition.

Bottomline: Sustained Momentum in US Sports Betting

The US sports betting market shows no signs of slowing down, with DraftKings and FanDuel retaining dominance and demographic trends fueling growth. While established players build on their strong foundations, emerging platforms like Fanatics and ESPN Bet face challenges in expanding market share. With rising participation, evolving consumer preferences, and continued innovation, the market promises robust opportunities for operators and stakeholders alike.