The first week of a new NFL season is the key time of year for “daily fantasy sports” (DFS) apps like FanDuel and DraftKings, and now that those companies are also rapidly launching sportsbook operations in states that have legalized sports betting, they are even more focused on aggressive customer acquisition.
It may come as no surprise, then, that DraftKings (DKNG) and FanDuel (PDYPY) both tell Yahoo Finance that the first week of the 2020 NFL season was their biggest week for new customer signups since fall 2015. (That combines DFS customers and sports betting customers; the companies do not break those numbers out.)
The superlative comes with a considerable asterisk: both companies offered plentiful promotions and free-entry codes for Week 1 to attract users.
“We pride ourselves on being absurdly fan-friendly, so in this time, we got promotions for everybody,” says FanDuel CEO Matt King. “We are doing a lot of promotional activity.”
DraftKings, for example, ran a sportsbook promotion allowing new users to place a bet (up to $50) on the Kansas City Chiefs +101, meaning the bet would pay out unless the Chiefs lost by 101 points or more (the biggest NFL blowout ever was by 73 points in 1940). It was basically free money, though users had to deposit money to make the bet, and it likely fueled many new signups.
It’s not just DraftKings and FanDuel doing that. As more and more states pass legislation, myriad gambling names like PointsBet, Bet365, William Hill, and Penn National Gaming (majority owner of Barstool Sports) are all scrambling to attract new customers.
“Everyone signing up for a sportsbook account is doing it through some kind of offer for a risk-free bet or deposit bonus,” says Dustin Gouker of the website Legal Sports Report. “There’s almost nobody signing people up without a promo offer. So I would not discount the customer gains based on that, although DraftKings has been particularly aggressive.”
In 2015, the legal landscape looked very different for DraftKings and FanDuel.
The two companies were growing rapidly and competing head-to-head for customers, while also working together in court to fight legal challenges from numerous attorneys general, most notably in New York. Soon enough, in 2016, the two rivals would announce their intent to merge, then call it off in 2017 when it became obvious regulators would not allow it.
FanDuel would go on to sell itself to Irish sportsbook Paddy Power in 2018, which was rebranded to Flutter Entertainment in the U.S., while DraftKings went public in April of this year by merging with an SPAC (special purpose acquisition company).
In other ways, 2020 looks a lot like 2015. Both companies are relentlessly advertising their apps on television again during live sports, only now they’re advertising both their fantasy and their betting products.
The American Gaming Association (AGA) says that revenue from legal sports betting was up 19% in 2020 through July, compared to the first seven months of last year—even with most live sports shut down from March through June due to the pandemic.
But the AGA also found, in a new survey conducted by Morning Consult, that fewer fans plan to bet on the NFL this year: 33.2 million people, down from 38 million last year. Only 20% of those bettors will place their bets at legal sportsbooks, but that’s up 18% from last year.
“The numbers we’re seeing are not consistent with that,” said DraftKings CEO Jason Robins when asked about the AGA survey. “We’re seeing everything go up, and we’re seeing record engagement levels. [Sept. 10] was a historic night for us... From our standpoint, everything is way up. And it’s not just because we’ve entered new states; even in the existing states we were in at the start of last NFL season, like New Jersey and West Virginia, we’ve seen enormous year-over-year growth. So from our perspective, it seems like more people are betting on the NFL than ever this year.”
FanDuel says its NFL Week 1 sportsbook customer signups were up 200% year over year.
DraftKings says its online sportsbook handle (total value of bets placed, not revenue) was up 500% in NFL Week 1 from last year. DraftKings shares are up more than 200% since it became public.
This story was updated on Sept. 18 at 4:40pm EST.
Daniel Roberts is an editor-at-large at Yahoo Finance and closely covers sports business. Follow him on Twitter at @readDanwrite.