DraftKings cut guarantee as daily fantasy activity, margins decline

Daily fantasy sports activity continued to fall in Week 12 of the NFL season, prompting DraftKings to cut $1m off the guarantee of its marquee football contest.

According to numbers crunched by DFS data specialists SuperLobby.com, Week 12 activity at DFS operators DraftKings and FanDuel fell around 7% from the previous week, marking the seventh consecutive week of declining participation. But the operators also saw declines in effective margins, breaking the pattern of recent weeks.

FanDuel reported total entry fees at its guaranteed prize pools (GPP) and cash games falling around 7% from the previous week to $21.8m. Despite the fall – partly a seasonal phenomenon but also attributable to the company’s withdrawal from the New York state market after Attorney General Eric Schneiderman issued a cease & desist order – FanDuel managed to post an effective margin of 10.04%, down around 0.3 points from the previous week.

DraftKings has opted to remain in the New York market while it fights Schneiderman in court, but it too saw GPP fees fall 7% from the previous week. DraftKings’ Week 12 margin was almost identical to FanDuel’s, but its week-on-week decline was steeper, falling 1.6 points from Week 12’s season-high 11.64%.