Will Fantasy Sports be Bigger than Online Slots? Probably Not

fantasy-sports-over-online-slotsAs many know, slots games rule both land-based and online casinos. In fact, many casinos dedicate around 70% of their selection to slots. But is there another game of chance on the rise that could eventually overtake slots? Jason Ader, former Wall Street Gaming analyst, seems to think so, and he shared his thoughts with CNBC. Let’s cover what Ader said and discuss if his slots thoughts have any validity at all.

Bigger than Slots in the Future

Ader, who, in addition to being a Wall Street gaming expert, is also an investor and board member of Las Vegas Sands, is pretty high on daily fantasy sports (DFS). Here’s an excerpt from what he told the host of CNBC’s Fast Money:

CNBC Host: “Fantasy sports, you think that’s going to replace slots, for real?”

Ader: “That’s the hot area, right? So fantasy sports is the biggest and hottest area in the gaming industry right now, no doubt about it. …. The business has the potential to be as big as Macau over time.”

If you check out the interview that’s linked above, remember that the discussion on fantasy sports vs. slots begins around the 31:30 mark. During the discussion, Ader notes that both DraftKings and FanDuel are multi-billion dollar pre-IPO valuation companies.

Chiefs Colts Football - Andrew LuckFantasy Sports over Slots: Not in this Lifetime

Let’s start by looking at what Adam Krejcik of Eilers Research said about DFS; Krejcik believes that the entire fantasy sports market will be worth $2.5 billion by 2020. Okay, that’s pretty good, but also consider that in Las Vegas alone, 2014 slots revenue was $2.9 million. And slots revenue for just the state of Nevada was $6.7 billion.

We’re not even considering worldwide land-based slots revenue or online slots revenue, both of which would blow DFS away. And keep in mind that game developers are currently adding video game-style elements into slots to ensure that they appeal to younger generations. So based on the adaptations and the way that slots crush DFS, don’t expect the latter to rule the gaming world at any point.