Report Highlights

U.S. Fantasy Sports: Market Overview

The U.S. fantasy sports market is distinctive because it operates as a federally tolerated but state-regulated industry. The Unlawful Internet Gambling Enforcement Act of 2006 exempts fantasy contests in which outcomes depend on participant skill and real-world athletic performance, which allowed daily fantasy operators to scale nationally. Total market revenue reached an estimated USD 9.4 billion in 2024, driven by entry fees, platform rake and advertising.

Unlike most global fantasy markets, which are dominated by free-to-play season-long leagues run by media properties, the U.S. market is driven by paid contests. A majority of revenue now comes from daily and pick'em formats. The country's dense professional sports calendar, from the NFL to the NBA, gives it the deepest data and content ecosystem in the world, while DraftKings and FanDuel hold a consolidated core facing fast-growing challengers.

Growth Drivers in U.S. Fantasy Sports

The first driver is sports betting legalization. Following Murphy v. NCAA in 2018, which struck down the Professional and Amateur Sports Protection Act, more than 35 states have legalized sports wagering. Operators in New Jersey, Pennsylvania and Ohio now bundle fantasy products with sportsbook accounts, which lowers customer acquisition costs and expands the paying user base.

The second driver is mobile-first pick'em adoption. PrizePicks and Underdog Fantasy lower entry barriers with small per-pick stakes, attracting users aged 18 to 34 who were previously inactive. The third driver is media integration. ESPN Fantasy and Yahoo Fantasy Sports bundle contests with broadcast and digital content, sustaining engagement during the NFL season and across March Madness.

Market Restraints and Entry Barriers

The most significant barrier is the state-by-state regulatory patchwork. Washington, Arizona, Iowa and Louisiana have restricted or prohibited daily fantasy contests, while other states impose licensing, age verification and responsible gaming requirements. An entrant must build separate compliance programs for each jurisdiction, which raises fixed costs and slows national rollout.

Incumbent advantages compound this burden. DraftKings and FanDuel command large brand budgets and proprietary sportsbook data, making customer acquisition expensive for newcomers. State taxes on gross gaming revenue, such as Pennsylvania's 36 percent tax on sports wagering, further compress margins and limit the capital available for marketing.

Market Opportunities in the United States

The nearest opportunity lies in states without comprehensive daily fantasy regulation, where pick'em products can launch under lighter licensing regimes. Our model estimates that these states account for roughly 18 percent of the adult population, representing an addressable base of about 45 million adults. Entrants that establish compliance early can capture share before incumbents expand into these markets.

A second opportunity is business-to-business data licensing. Sportsbooks and media companies require real-time player statistics and projection models, and our model values this segment at an estimated USD 0.7 billion in 2025. Women's professional leagues, including the WNBA, also offer an underpenetrated content category with growing fan engagement.

Market at a Glance

Leading Market Participants

• DraftKings
• FanDuel
• Underdog Fantasy
• PrizePicks
• Yahoo Fantasy
• ESPN Fantasy
• Sleeper
• Fanatics Fantasy
• Betr
• Genius Sports

Regulatory and Policy Environment

The federal framework rests on the Unlawful Internet Gambling Enforcement Act of 2006, which exempts fantasy sports from its definition of unlawful internet gambling, and on the 2018 Supreme Court decision in Murphy v. NCAA. Day-to-day oversight sits with state regulators, including the New Jersey Division of Gaming Enforcement, the Pennsylvania Gaming Control Board and the Ohio Casino Control Commission. Operators must obtain licenses, verify player ages and comply with responsible gaming rules.

Compliance timelines typically run six to nine months from application to launch, and state tax rates on gross receipts vary widely by jurisdiction. Operators also face scrutiny from the Commodity Futures Trading Commission as pick'em and prediction-style products expand. Companies that map state-level requirements early can shorten approval cycles and reduce enforcement risk.

Long-Term Outlook for Fantasy Sports in the U.S.

By 2032, the U.S. market is forecast to reach USD 19.7 billion, with growth concentrated in pick'em formats and mobile-first platforms. Sportsbook integration will become the default distribution model in legal states, and fantasy products will function as engagement layers for betting customers. Consolidation among mid-tier operators is expected to accelerate as compliance costs rise.

Regulatory divergence will persist, with states such as New Jersey and Pennsylvania setting licensing benchmarks while restrictive states hold their current positions. Entrants that build modular compliance infrastructure will capture the largest share of growth. Data licensing and media partnerships will deliver a growing share of profit by the end of the forecast period.