When sports betting legalization swept across North America, Europe expanded regulations, and Asia-Pacific markets opened up, investors predicted a gold rush. DraftKings, FanDuel, Bet365, they would print money. Bettors always lose eventually, right?
Seven years later, the numbers tell a different story. The global sports betting market exploded from $88.7 billion in 2023 to a projected $103 billion in 2024. DraftKings generated $4.8 billion in revenue. FanDuel hit $5.78 billion. Bet365 reached ÂŁ3.72 billion ($4.65 billion).
Yet DraftKings lost $507 million in 2024 alone, with cumulative losses exceeding $3 billion since launching mobile betting. FanDuel’s parent company Flutter slashed its 2024 revenue forecast by $370 million in January 2025 because NFL favorites won too often. Bet365, one of the few profitable operators, barely grew 9% in a market expanding at double-digit rates globally.
The Global Sports Betting Reality (2024-2025):
- Global Market Size: $103.08 billion (2024), projected to hit $232.5 billion by 2032
- DraftKings 2024 Revenue: $4.8 billion (net loss: $507.3 million)
- FanDuel Revenue Miss: $370 million below forecast due to “customer-friendly” NFL season
- Bet365 Annual Revenue: ÂŁ3.72 billion ($4.65 billion), 9% growth (analysts called it “disappointing”)
- Industry Growth Rate: 10-11% CAGR globally
- North America Growth: 12.7% CAGR (fastest growing regulated market)
- Europe Market Share: 41.3% of global betting (mature, highly regulated)
How does an industry with explosive global growth, billions in revenue, and millions of customers lose money? And with legalization spreading across Brazil, Canada, parts of Asia, and the Middle East, why are the world’s biggest operators still hemorrhaging cash?
The answer reveals how sports betting companies built a business model that might profit… eventually… maybe… if customer acquisition costs don’t keep escalating, if marketing wars don’t intensify across new markets, if football favorites stop winning at historic rates, and if tech-savvy competitors don’t undercut everyone on pricing.
The $232 Billion Global Gold Rush Nobody’s Winning
The global sports betting transformation started gradually, then exploded. Europe led with mature markets in the UK, Germany, and Italy. North America accelerated after the US Supreme Court struck down federal betting bans in May 2018. Latin America opened Brazil and Argentina. Asia-Pacific saw regulatory shifts in Australia and India.
Global Sports Betting Market Evolution:
- 2023: $88.7 billion total market (all sports betting)
- 2024: $103.08 billion (16% growth)
- 2028 Projection: $150-151.9 billion
- 2032-2033 Projection: $224-232.5 billion
- Compound Annual Growth Rate: 10.12-11% globally
Regional Market Breakdown (2024):
- Europe: 41.3% market share ($42.6 billion), mature and heavily regulated
- North America: $30 billion (fastest growing at 12.7% CAGR)
- Asia-Pacific: Emerging markets, high growth potential
- Latin America: 13.7% CAGR (Brazil driving explosive growth)
- Middle East & Africa: Developing markets, regulatory frameworks evolving
That’s unprecedented growth. Yet the companies dominating these markets, the ones with massive brand recognition and technological advantages, can’t convert revenue into profit.
The Industry’s Economic Paradox:
- Sportsbooks typically keep 8-9% of all money wagered (“hold percentage”)
- From $103 billion wagered globally in 2024: $9.3 billion potential revenue
- Yet the two largest operators (DraftKings, FanDuel) combined losses: $877 million in 2024
- Bet365, one of few profitable operators, grew slower than market average
The industry’s fundamental economics seem straightforward worldwide: accept bets, pay winners, keep the difference. But reality proves far more complex when you’re spending billions to acquire customers in markets where your global competitors do the same.
DraftKings: $4.8 Billion Revenue, $507 Million Loss
DraftKings achieved something remarkable in 2024: its first-ever positive adjusted EBITDA of $181.3 million. Wall Street analysts cheered. The company’s stock jumped 25% in early 2025.
Then investors examined the actual net loss: $507.3 million for the full year.
DraftKings 2024 Financial Reality:
- Revenue: $4.8 billion (30.1% year-over-year increase)
- Q4 2024 Revenue: $1.39 billion (13.2% increase)
- Net Loss: $507.3 million (improvement from $802.3 million loss in 2023)
- Q4 Net Loss: $139.2 million (202.2% increase vs Q4 2023)
- Cumulative Losses Since 2018: Over $3 billion
- Monthly Unique Paying Customers: 4.8 million (36% increase)
- Average Revenue Per User: $97 (down 16% due to Jackpocket lottery acquisition)
- Operating Markets: 25 US states for sportsbook, 5 states for iGaming
DraftKings achieved positive adjusted EBITDA through aggressive accounting, not economic transformation. Adjusted EBITDA excludes stock-based compensation ($200+ million annually), acquisition costs, and other “non-recurring” expenses that somehow recur every quarter.
Where DraftKings’ Money Goes:
- Cost of Revenue (Q4 2024): $118 million increase vs 2023
- Marketing Expenses (Q4 2024): $77 million increase
- Product and Technology: 16.4% increase
- General and Administrative: 59.2% increase
- Total Operating Cost Increase (2024): $650 million more than 2023
The company spent $650 million more in operating costs in 2024 than 2023, nearly erasing the benefit from $1.25 billion in additional revenue.
The NFL Season That Cost Sportsbooks $470 Million Globally
DraftKings’ Q4 2024 results revealed something uncomfortable for the global sports betting industry: when professional gamblers worldwide call a season “customer-friendly,” it means sportsbooks hemorrhage money.
The 2024 NFL season saw favorites win at the highest rate in 40 years. Week after week, chalk prevailed. Underdogs failed. Parlays hit. Bettors worldwide cashed tickets at unprecedented rates.
The 2024 “Customer-Friendly” NFL Season Impact:
- Q4 2024 handle globally: Over $20 billion (including international markets)
- DraftKings Q4 handle: $14.9 billion (up from $12 billion in Q4 2023)
- DraftKings Q4 revenue: Only $825 million (vs $734 million in Q4 2023)
- Revenue growth: Just 12.4% despite 24% handle increase
- Actual hold percentage: 9.4% (vs 10.5% structural target)
- Lost potential revenue (DraftKings alone): Over $100 million
DraftKings CEO Jason Robins acknowledged the crisis during the earnings call: “We have analyzed, as we always do, everything thoroughly, and we are 100% confident that these are random outcomes.”
But here’s the uncomfortable truth for the global industry: sports betting companies worldwide can control marketing spend, technology costs, and operational efficiency. They cannot control whether NFL favorites win 75% of games, whether Premier League underdogs pull upsets, or whether Champions League parlays hit at historic rates.
FanDuel’s $370 Million Revenue Catastrophe
If DraftKings’ Q4 2024 was painful, FanDuel’s was catastrophic. In January 2025, Flutter Entertainment (FanDuel’s parent company and the world’s largest online betting operator) announced that full-year 2024 US revenue would be approximately $370 million lower than previously guided.
FanDuel’s Global Parent Company Crisis:
- Flutter Entertainment: World’s largest online betting company
- Global Brands: FanDuel (US), Betfair (UK), Paddy Power (Ireland), PokerStars (global), Sportsbet (Australia), Sky Betting & Gaming (UK)
- Previous 2024 US revenue guidance: $6.05-6.25 billion
- Revised 2024 US revenue: $5.78 billion (midpoint)
- Revenue reduction: $370 million
- Adjusted EBITDA dropped: $205 million below forecast
- New EBITDA midpoint: $505 million
Flutter’s statement explained the crisis affecting their global operations: “Following Nov. 12, continued strong US player momentum has been offset by a period of very unfavorable sports results across the remainder of November and in December, primarily on NFL parlay and same-game parlay outcomes. The 2024-25 NFL season to date has been the most customer-friendly since the launch of online sports betting with the highest rate of favorites winning in nearly 20 years.”
Translation: Bettors won $370 million more than FanDuel expected because football games had normal outcomes. Not fraud. Not cheating. Just favorites winning at historically high rates.
Why This Matters Globally
FanDuel and DraftKings together control over 70% of the North American sports betting market. When both companies simultaneously lose hundreds of millions due to “customer-friendly outcomes,” it reveals how thin profit margins truly are worldwide.
When you add Flutter’s other global brands (Betfair, Paddy Power, Sportsbet Australia), the company operates across North America, Europe, and Asia-Pacific. If a single bad NFL season costs one division $370 million, what happens when customer-friendly outcomes hit simultaneously across Premier League, Champions League, NBA, and cricket markets?
Bet365: Profitable But Losing Market Share “Dangerously Rapidly”
While DraftKings and FanDuel bleed cash, UK-based Bet365 remains one of the few consistently profitable global operators. Yet even their success story has worrying cracks.
Bet365 FY 2023-24 Results (Year Ending March 31, 2024):
- Group Revenue: ÂŁ3.72 billion ($4.65 billion), 9% increase
- Sports Betting Revenue: 11% growth (driven by US expansion, product enhancements)
- Gaming Revenue: Flat (stagnant despite market growing at 10%+ globally)
- Profit Before Tax: ÂŁ626.6 million ($782.97 million)
- Brand Value: $4.02 billion (highest in industry)
- Global Operations: UK, Europe, Australia, Americas, Asia
Industry analysts called Bet365’s 9% growth “disappointing” given global market growth exceeded 10% in 2024.
Regulus Partners’ Scathing Analysis
“Given that global inflation was around 4% during the period and most online gambling markets managed solid double-digit growth, it is hard to call these topline results anything more than disappointing.”
The analysts identified four critical challenges facing Bet365 globally:
- Competitor Product Catch-Up: DraftKings, FanDuel, and regional operators matched Bet365’s in-play betting technology
- Slower Adoption: Mass market multiples and bet builder bets not driving expected growth
- Gaming Stagnation: Unable to capitalize on post-pandemic casino growth
- VIP Decline: Loss of high-stakes bettors and grey market contributions
The Market Share Crisis
Regulus concluded that Bet365 is losing market share “dangerously rapidly” amid increasing global competition:
- US: DraftKings and FanDuel dominating
- Brazil: Kaizen Gaming, Betano gaining ground
- Europe: Local operators and Flutter brands competing
- Australia: Sportsbet (Flutter) challenging dominance
“Bet365 has run out of in-play growth and has not yet found a similar growth engine for a world in which in-play betting is now a relatively mature commodity,” Regulus warned.
Even the industry’s most profitable operator can’t maintain growth rates matching the overall market. If Bet365 struggles with single-digit growth in a double-digit environment, what does that say about operators still losing hundreds of millions?
The $15 Billion Global Customer Acquisition War
Sports betting companies worldwide don’t lose billions because bettors win too much. They lose billions because acquiring each new customer costs more than that customer generates in profit, and the companies keep spending anyway across every market they enter.
The Customer Acquisition Economics Crisis:
- DraftKings: 4.8 million monthly paying customers, $3+ billion cumulative losses since 2018
- Cost Per Acquisition: $625+ per customer (calculated from losses divided by customer base)
- Average Revenue Per User: $97 monthly
- Payback Period: 7+ months to recoup acquisition cost (assuming no churn)
- Actual Churn Rate: 30-40% of customers cancel within 6 months
Global Marketing Spending (Estimated 2024):
- DraftKings: $1.2-1.4 billion in marketing and advertising
- Flutter (FanDuel, Betfair, etc.): $2+ billion across global brands
- Bet365: ÂŁ800 million+ ($1 billion+)
- Industry Total: $10-15 billion globally in customer acquisition
The math doesn’t work. When customer acquisition costs $625 but customers generate $97 monthly in revenue, operators need 7 months of retention just to break even before accounting for operating costs, technology investment, payment processing, and regulatory compliance.
Why Companies Keep Spending
1. Market Share is Everything
In sports betting, being the market leader creates compounding advantages globally. DraftKings and FanDuel dominate North American market share (combined 70%+). Bet365 leads in Europe and Australia. Flutter’s brands control significant regional shares.
Market leaders can:
- Negotiate better odds with data providers like Sportradar
- Secure exclusive partnerships with sports leagues (NFL, NBA, Premier League)
- Drive better retention rates through network effects (friends bet where friends bet)
- Access cheaper capital for further expansion
Companies believe that spending $1.2 billion on marketing today to capture 40% market share will generate $3 billion in annual profit five years from now. Maybe. If retention improves. If acquisition costs decline. If new competitors don’t enter. If regulations don’t tighten.
2. The Land Grab Continues Globally
Sports betting isn’t mature globally. New markets open constantly:
Recent Market Openings (2023-2025):
- Brazil: Legalized sports betting January 2024, market size projected $3.7 billion by 2028
- Ontario, Canada: Launched legal market April 2022
- New York: Mobile betting launched January 2022 (became largest US state market)
- Germany: Interstate Treaty implemented July 2021, still evolving
- Netherlands: Online market opened October 2021
- Argentina: Multiple provinces legalizing
- Japan: Sports betting framework under consideration
When Brazil opens a $3.7 billion market, every global operator rushes in. DraftKings, FanDuel, Bet365, Flutter, Betway, Betsson, they all spend aggressively to capture market share before competitors establish dominance.
The logic: spend $500 million on customer acquisition in Brazil now, dominate the market, generate $200 million annual profit for decades.
The reality: competitors spend $500 million too. Nobody dominates. Acquisition costs stay elevated. Profit remains elusive.
3. Live Sports Partnerships Cost Billions Globally
To acquire customers, sportsbooks buy legitimacy through partnerships with sports leagues, teams, and media globally.
Major Global Sports Partnerships (2023-2025):
North America:
- FanDuel + NBA: Official sports betting partner, $200+ million annually
- DraftKings + NFL: Official sports betting partner across multiple teams
- Bet365 + NHL: Expanding North American presence
Europe:
- Bet365 + DAZN: Integration of in-play betting with sports streaming (UK)
- Flutter brands + Premier League: Multiple sponsorships
- Various operators + European football clubs: Jersey sponsorships, stadium naming rights
Global:
- Betting companies + Formula 1: Multiple operators sponsoring teams
- Cricket sponsorships: IPL, international cricket across Asia-Pacific
- Tennis partnerships: ATP, WTA tour sponsors
These partnerships cost $3-5 billion annually across the global industry. Operators pay because partnerships provide:
- Brand credibility (official partner of the NFL/Premier League/IPL)
- Marketing exposure (logos on broadcasts, stadiums, jerseys)
- Data access (real-time statistics for in-play betting)
- Customer acquisition (fans follow their league’s recommended sportsbook)
But when every operator sponsors sports leagues, nobody gains competitive advantage. FanDuel sponsors the NBA. DraftKings sponsors the NFL. Bet365 partners with DAZN. Customers see betting ads everywhere, diluting each operator’s message.
4. Technology and Compliance Never Stop Costing Money
Running a global sportsbook requires massive ongoing technology investment:
Annual Technology Costs:
- Platform development and maintenance: $150-300 million per major operator
- Data feeds: $50-100 million (odds, real-time scores, player statistics)
- Payment processing: 2-3% of all handle (billions in transaction costs)
- Cybersecurity and fraud prevention: $30-50 million annually
- AI and machine learning: $40-80 million (odds optimization, risk management)
- Mobile app development: $20-40 million per year
Regulatory Compliance Costs:
- Licensing fees: $500K-$5 million per jurisdiction (multiply across 20+ markets)
- Responsible gambling programs: $10-20 million per operator
- Age verification systems: $5-10 million annually
- Auditing and reporting: $15-25 million
- Legal and lobbying: $30-50 million across multiple jurisdictions
- Tax payments: 10-51% of gross gaming revenue depending on jurisdiction
In the UK, operators pay 15% tax on gross gambling yield. In Pennsylvania (US), the tax hits 36%. In France, it’s 10.6% on sports betting revenue. In Australia, various state taxes apply. These taxes alone consume $500 million-$1 billion annually for large global operators.
When you add technology costs, compliance expenses, payment processing fees, and data feeds, it costs $400-600 million annually just to operate a global sportsbook before accounting for marketing or customer acquisition.
The Structural Crisis Global Sportsbooks Can’t Solve
Even as sports betting legalization spreads globally, operators face structural problems no expansion strategy can fix.
Problem 1: The Profitability Timeline Keeps Extending
In 2018, when sports betting legalization began in North America, analysts predicted profitability by 2022-2023. That timeline moved to 2024-2025. Now it’s 2026-2027. Some analysts now project 2028-2030.
The Moving Profitability Goalposts:
- 2018 Predictions: “Sportsbooks will be profitable by 2022”
- 2020 Revised: “Profitability by 2024 as markets mature”
- 2023 Updated: “2026-2027 as customer acquisition normalizes”
- 2025 Reality: “Maybe 2028-2030 if new market expansion slows”
DraftKings has been operating since 2012 (daily fantasy) and mobile sports betting since 2018. After 13 years, the company has never posted an annual profit. Cumulative losses exceed $3 billion.
At what point do investors stop believing profitability is “just around the corner”? When cumulative losses hit $5 billion? $7 billion? $10 billion?
Problem 2: Favorable Betting Outcomes Are Uncontrollable
The 2024 NFL season proved a fundamental truth: sportsbooks cannot control whether favorites win or underdogs cover. When customer-friendly outcomes occur simultaneously across multiple sports globally, entire quarterly earnings evaporate.
Customer-Friendly Scenarios That Wreck Profitability:
- Football: Favorites winning at 75%+ rates (NFL 2024)
- Soccer: Underdogs and draws hitting unexpectedly (Premier League, Champions League)
- Basketball: Home teams covering spreads consistently
- Cricket: Favorites winning IPL, international matches across legal Asian markets
- Tennis: Top seeds advancing (eliminating upset betting value)
- Parlays: Multiple legs hitting at higher-than-expected rates
The industry’s 8-9% global hold percentage assumes normal statistical outcomes. When favorites win 5% more often than historical averages for one quarter, the entire industry loses $2-3 billion in expected revenue.
Sports betting companies worldwide can’t hedge against normal variance. If they could, they wouldn’t be bookmakers, they’d be banks. The business model requires accepting that some months, quarters, or even entire sports seasons will be unprofitable because chalk wins.
Problem 3: The Competition Intensifies Globally
When sports betting was illegal or available only in limited markets, Bet365 dominated Europe, Sportsbet controlled Australia, and Las Vegas handled North American action. Barriers to entry were massive: regulatory complexity, payment processing challenges, sports data access.
Those barriers have collapsed globally. Now:
North America:
- DraftKings, FanDuel, BetMGM, Caesars, Bet365, PointsBet, Barstool (Penn Entertainment)
- 15+ operators competing in major states
- More launching as new states legalize
Europe:
- Bet365, Flutter brands (Betfair, Paddy Power), Entain (bwin, Coral), Kindred, Betsson, William Hill
- 50+ operators across regulated markets
- Local operators in each country
Latin America:
- Global operators + regional players (Betano, Betcris, Codere, Rush Street)
- Brazil attracting 40+ licensed operators
Asia-Pacific:
- Bet365, Sportsbet (Flutter), local operators across multiple jurisdictions
More competition means:
- Higher customer acquisition costs (more operators bidding for same customers)
- Lower profit margins (competitors offering better odds, bigger bonuses)
- Increased marketing spend (fighting for attention in crowded markets)
- Pressure on retention (customers switching for promotions)
Problem 4: Young Bettors Don’t Generate High Revenue
The most damaging long-term global trend: younger demographics don’t bet at the same rates or amounts as older customers.
Demographic Betting Patterns:
- Bettors 40-65: Average $450 monthly spend, low churn, consistent year-round
- Bettors 25-39: Average $180 monthly spend, seasonal (high during playoffs), moderate churn
- Bettors 18-24: Average $95 monthly spend, high churn (40%+ cancel within 3 months)
Older bettors generate 3-5x more lifetime value but represent a shrinking demographic. Younger bettors download apps, claim signup bonuses, bet small amounts, then delete the app. The customer acquisition costs are identical ($500-700 globally), but lifetime value differs dramatically.
The Free Content Problem Globally:
- NFL highlights on YouTube: Free
- Premier League goals on Twitter: Free
- Cricket highlights on Instagram: Free
- Betting tips on TikTok: Free
- Sports news on Reddit: Free
Why would a 22-year-old pay transaction fees, risk real money, and deal with betting app complexity when they can consume all sports content free? Younger demographics engage with sports differently than previous generations, and betting operators haven’t solved the engagement problem.
What Happens Next: Three Global Scenarios
Scenario 1: The Consolidation Wave
The sports betting industry globally follows telecommunications, airlines, and banking: explosive competition initially, then massive consolidation as unprofitable operators exit or merge.
This Path Leads To:
- 3-5 global mega-operators control 80% of all markets by 2030
- DraftKings merges with a major European operator
- Flutter acquires smaller regional operators across Latin America and Asia
- Bet365 sells to a tech company (Amazon, Apple, Google)
- 100+ small operators exit due to unsustainable losses
Evidence This Is Already Happening:
- Flutter acquired Snaitech (Italy) for €2.3 billion (September 2024)
- Flutter acquired NSX Group (Brazil) majority stake (October 2024)
- DraftKings acquired Jackpocket (lottery) expanding portfolio
- 888 Holdings merged with William Hill assets (2022)
Scenario 2: The Profitability Pivot
Operators globally accept that pure sports betting will never achieve 25% profit margins and pivot to integrated entertainment platforms combining sports betting, online casino, lottery, and media.
This Path Leads To:
- Sports betting becomes a “loss leader” driving traffic to profitable casino gaming
- Operators focus on cross-selling: sign up for sports, convert to higher-margin casino
- Media integration: betting apps include streaming, commentary, exclusive content
- Subscription models: monthly fees for premium features, better odds
Evidence This Is Already Happening:
- DraftKings acquired Jackpocket (lottery), explicitly states cross-selling focus
- FanDuel rebranded regional sports networks as FanDuel Sports Network (October 2024)
- Bet365 partnering with DAZN to integrate betting with streaming (2024)
- Multiple operators launching media divisions
Scenario 3: The Tech Company Takeover
Amazon, Apple, Google, or other tech giants acquire major sports betting operators, integrating gambling into their broader entertainment ecosystems. Apple offers betting within Apple TV+ sports content. Amazon adds betting to Prime Video. Google integrates betting into YouTube sports.
This Path Leads To:
- Tech companies operate sportsbooks at zero profit or losses indefinitely
- Betting becomes a feature, not a standalone business
- User bases explode (Apple has 2 billion devices, Amazon has 200+ million Prime members)
- Traditional operators can’t compete with tech company resources
Industry Speculation:
Tech companies haven’t acquired major betting operators yet, but logic suggests they eventually will. Amazon already streams Thursday Night Football (NFL). Apple has MLS rights. Google owns YouTube with billions of sports viewers.
Adding betting functionality to existing sports content makes strategic sense for tech companies even if the betting division loses money initially. For Amazon, losing $500 million on betting while driving $2 billion in Prime Video subscriptions is excellent ROI.
The Uncomfortable Global Truth
Did sports betting companies overpay for market share? Absolutely. DraftKings, FanDuel, and dozens of operators globally spent billions acquiring customers at unsustainable costs. They paid premium prices for sports partnerships. They launched in new markets before achieving profitability in existing ones.
By any traditional business analysis, the global sports betting industry is a disaster. Revenue grows 10-11% annually, yet the largest operators remain deeply unprofitable seven years after North American legalization. Cumulative industry losses exceed $10 billion.
But here’s the paradox: operators had to overpay because not competing would guarantee irrelevance.
The Real Economics of Sports Betting
Without aggressive customer acquisition: Lose market share to competitors Without sports partnerships: Lack credibility with mainstream bettors Without new market expansion: Miss generational growth opportunity Without technology investment: Inferior product drives customers to rivals
Sports betting companies globally chose to overpay for growth because the alternative, watching competitors dominate while they preserve capital, would have destroyed more value than overpaying preserves.
The $232 Billion Question
The global sports betting market is projected to hit $232.5 billion by 2032-2033. That’s 125% growth from 2024 levels. New markets continue opening across Latin America, Asia, Africa, and the Middle East.
Yet the companies best-positioned to capture that growth, DraftKings, Flutter, Bet365, either lose hundreds of millions annually or grow slower than the market despite being profitable.
What happens when unstoppable global expansion meets immovable structural losses?
We’re watching it unfold across every sports betting market worldwide. And the answer will determine whether sports betting becomes a profitable global industry or a cautionary tale about burning billions chasing growth that never converts to sustainable profit.
Right now, the evidence suggests the latter. But the companies spending billions hope, desperately, they’re wrong.
Because if DraftKings, FanDuel, and Bet365 can’t make sports betting profitable at scale, nobody can.
