Pricing Accuracy / Straight Bets / Parlays
DraftKings vs FanDuel Per Bet Margin Efficiency (Pricing Accuracy)
| Sportsbook | Feb & Mar 23 | Q2 23 | Q3 23 | Q4 23 | Q1 24 | Q2 24 | Q3 24 | Q4 24 | Q1 25 | Q2 25 | Q3 25 | Q425 |
| DraftKings | 3.09% | 4.27% | 3.41% | 4.46% | 3.39% | 4.48% | 3.35% | 4.55% | 5.42% | 4.22% | 5.37% | 4.57% |
| FanDuel | 3.15% | 3.81% | 3.32% | 2.59% | 3.05% | 5.37% | 3.94% | 3.54% | 4.74% | 4.6% | 5.48% | 4.11% |
The table shows per bet GGR/Hold margins (from Illinois) after subtracting the HoldCrunch Percentage for Straight Bets. The higher the margin after neutralizing differences on price, the greater the pricing accuracy.
What about promos? Does that skew GGR/Hold numbers? Below is our estimate of ‘per bet profitability’, i.e. how much money is made from each $ bet after deducting promo costs as well as neutralizing differences on price. We are using our own estimate of promo spend in a state such as Illinois. We know promo spend is less in higher tax states that don’t allow for promo deductions so we have taken the reported promo spend in NGR states and reduced them using known data for other states:
DraftKings vs FanDuel Per Bet Profitability
| Sportsbook | Feb & Mar 23 | Q2 23 | Q3 23 | Q4 23 | Q1 24 | Q2 24 | Q3 24 | Q4 24 | Q1 25 | Q2 25 | Q3 25 | Q425 |
| DraftKings | 1.95% | 3.25% | 2.21% | 2.95% | 2.32% | 3.35% | 2.29% | 2.81% | 3.3% | 3.11% | 2.78% | 3.84% |
| FanDuel | 2.27% | 2.87% | 2.42% | 1.91% | 2.24% | 4.28% | 2.87% | 2.4% | 3.12% | 3.55% | 3.53% | 2.85% |
Here is Peter Jackson, Flutter CEO, talking to analysts about ‘pricing accuracy’ on 26th March 2024:
“It’s really important that people understand that we actually offer the best prices to our customers,” Jackson said. “So we’re offering the best prices in the market, cheaper than our competitors, and yet we end up with a better margin. And that’s because of our pricing accuracy and our parlay penetration. It’s slightly counter intuitive, I know, but we offer the best odds to our customers but end up with the best margin. It’s also boosted by the parlay penetration but it’s because of our pricing accuracy.”
And here is Jason Robins, DraftKings CEO, answering an analyst’s question about pricing competitiveness and accuracy on their earnings call on 3rd May 2024:
“We always make sure we are competitive [on price] so we’re not trying to win on price but we’re also trying not to have worse pricing than anyone else out there, and the real sweet spot is if you have great models and your pricing is tight you can actually hold better and continue to be super competitive on the pricing side so those things are not at odds at all.”