Fantasy as a Sportsbook On-Ramp
Diving deeper into
Trevor John, co-founder of Underdog Fantasy, on the business model of fantasy sports
players in the sports betting market like Caesars and MGM, or even Fanatics, who don't have fantasy products.
Analyzed 7 sources
Reviewing context
Fantasy is the cheapest way for a sportsbook to build habit before asking for a real money wager. DraftKings and FanDuel proved that daily fantasy can be an on ramp into sportsbook play, because users already open the app for lineups, player picks, and season long contests. That is why operators without a real fantasy layer are missing a low cost feeder product, not just a side game.
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Underdog is attacking the market from the opposite direction. It started with fantasy contests that take roughly 10% to 15% of entry fees, then moved into sportsbook in North Carolina in March 2024, using fantasy players as a built in audience for betting.
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Caesars has already tested this logic before. It invested in SuperDraft in 2020 and described daily fantasy as complementary to its mobile sports strategy, which shows large sportsbook operators understand the funnel value even if fantasy is not core to their current product set.
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Fanatics is taking a different path. Its app links merch, rewards, free to play games, collectibles, and sportsbook, so it is building habit through commerce and loyalty instead of paid fantasy contests. That can lower acquisition cost, but it does not create the same lineup and pick based engagement loop.
The next phase is convergence. Fantasy first operators will keep adding sportsbook and casino, while sportsbook and commerce players add more game like products that keep fans checking the app every day. The winners will be the companies that control the cheapest repeatable path from fan attention to wallet activity.