How FanDuel and DraftKings Make Money

FanDuel and DraftKings are two platforms that offer short-term fantasy sports. Both companies generate revenue through fees, advertising, and partnership with other companies in the industry, such as sports leagues.

The sports betting industry rakes in hundreds of millions of dollars each year, thanks to a loophole in the law against gambling. While there are many fantasy sports sites and apps, FanDuel and DraftKings have capitalized on the growing number of sports fans looking for a quick and easy way to get involved with fantasy leagues.

FanDuel (Flutter Entertainment)

• Exchange: NYSE, LSE
• Net Income (Q4 2025): -$8 million (Flutter Entertainment)
• Revenue (Q4 2025): $4.74 billion (Flutter Entertainment)
• Market Cap (April 2026): $18.65 billion (Flutter Entertainment)

FanDuel is owned by the holding company Flutter Entertainment, an Irish bookkeeper based in Dublin. Established in 2009, FanDuel is one of the largest fantasy sports sites in the United States. It was acquired by Flutter in 2018.

In addition to fantasy sports, the platforms also offer sports betting, FanDuel’s services include sports betting, horse racing, and online casinos. It partners with major sports leagues including the National Hockey League, National Football League, National Basketball Association, and Major League Baseball.

DraftKings

• Exchange: Nasdaq
• Net Income (Q4 2025): $136.43 million
• Revenue (Q4 2025): $1.99 billion
• Market Cap (April 2026): $11.42 billion

DraftKings is one of the country’s most popular fantasy sports services. Founded in 2012 in Boston, the company has locations in 11 countries. For its 2025 fiscal year, the company reported approximately 4 million monthly unique paid users (with an average revenue of $125 per user) across its daily fantasy sports, Sportsbook, and iGaming services.

The company raised $1 billion in capital through several financing rounds between 2012 and 2024. In April 2020, the company went public through a reverse merger involving SBTech and Diamond Eagle Acquisition Corp., a public company that ceased trading. After the merger, DraftKings began trading on the Nasdaq under the ticker symbol DKNG. The deal was valued at $3.3 billion.

How FanDuel and DraftKings Make Money

FanDuel and DraftKings lead the industry in one-day fantasy football leagues. Users play for real money in contests starting at a $0.01 commitment on DraftKings and $1 on FanDuel. There are no associated subscription fees, which allows both services to continue to grow at a fast pace.

The bandwidth required to take on extreme traffic spikes during prime sports hours can be a hefty cost for a sports betting platform. This means both FanDuel and DraftKings need to generate a significant amount of revenue.

So how do they do that? Advertising. This means that both companies spend heavily on marketing. DraftKings spent over $1.38 billion on marketing and sales in 2025. Flutter, FanDuel’s parent company, spent $3.68 billion in 2025 across all its brands.

Both companies make money from player entrance fees and commissions on wagers. For instance, DraftKings may collect 10% from users who pay for league buy-ins. So, for every $1 paid by a user, the company might take $0.10 as its share. The remaining $0.90 from each user could be placed into the pool and paid out to the winner at the end.

The companies also make money in other ways than commissions and fees for online gambling. They also sell ads on their sites, offer digital lottery services, and partner with big sports industry names like NBC, Sports Illustrated, Comcast, and Sporting News to brings in revenue. Professional leagues see tremendous potential to engage existing fans and acquire new ones by partnering with sports betting platforms.

Legislative and Legal Battles

In 2017, FanDuel and DraftKings each paid $1.3 million to settle a lawsuit with the Attorney General’s office in Massachusetts. The settlement was the result of an investigation into allegations that both companies were involved in deceptive and unfair practices. The state’s top lawyer didn’t elaborate on the exact nature of the charges.

At one point, FanDuel and DraftKings tried to merge into a single entity, but the merger was terminated because the Federal Trade Commission (FTC) claimed the new company would become a monopoly with a combined 90% of the U.S. DFS market.

In 2024, the National Football League players’ union sued DraftKings for using players’ names and likenesses without permission. The Major League Baseball players’ union followed suit weeks later against both DraftKings and FanDuel.

The Bottom Line

Fantasy sports are a huge, lucrative business that makes companies like FanDuel and DraftKings millions of dollars in revenue each year, much of which is derived from fees, advertising, and partnerships. Although digital fantasy sports are not considered gambling, these companies still have a lot of obstacles before they become fully legal in all 50 states.