FanDuel and DraftKings prepare for increased betting

Sportsbooks and daily fantasy operators are preparing for the Summer Olympics surge.

The Paris games, which begin July 26, will be the first to be held since legal gambling became widespread in the United States. The gambling industry expects a surge in betting compared with the previous Summer Games in Tokyo, particularly for sports such as men's and women's basketball, soccer and tennis.

“For decades, the Olympics and gambling have been seen as distant from each other. This year we'll see them merge,” said Max Bichsel, executive vice president for North America at Gambling.com Group, a digital marketing company for the global online gambling industry.

These Olympics come at an opportune time for bookmakers, during the off-seasons of high-volume betting leagues like the NFL and NBA. But whether this will change the situation for betting operators remains to be seen.

The effect could be more muted for giants FanDuel and DraftKings, which together hold about 80% of the U.S. online gambling market share, than for smaller players.

“If you want to look at this from an annual perspective for a company like DraftKings “Even though it's not FanDuel, the impact will be relatively minor,” said Jordan Bender, senior equity analyst at Citizens JMP. “Obviously it will be positive, but it won't be as big as we might think and a lot of it will depend heavily on viewership.”

A representative of FanDuel, which is owned by Fluttersaid the Olympics probably won't change much for sportsbooks. DraftKings did not respond to a request for comment.

Still, the expected rise in Olympic betting underlines the huge boom the market has experienced in recent years.

More than 30 states now allow some form of sports betting, with many of them allowing mobile and online betting, a dramatic increase since the last Summer Olympics.

The Tokyo Olympics were held just a few years after the Supreme Court ruling that paved the way for legal betting across the United States. In 2021, 97 million American adults were able to place a wager, compared to 164 million American adults who will be able to wager this year, according to the American Gaming Association.

“Sports bettors are looking for something to bet on and incremental events are going to help,” Bender said. “The hardcore bettor, someone who bets week in and week out on the NFL, NBA, NHL — that's where you're going to make a lot of money.”

Still, the Olympics may not trigger the surge in betting seen in other sports in the U.S. Some state regulations may prevent betting on many events, and users can only bet on medal competitions.

Olympic viewership in the United States has suffered in recent years, particularly due to the difficult time difference between Tokyo in 2021 and Beijing in 2022 (host of the Winter Games), as well as the absence of fans during the pandemic.

American punters will also face a time zone issue this year. While Paris' time zone (six hours ahead of Eastern Time) presents fewer difficulties for Americans than Tokyo's 13-hour difference in 2021, prime-time events will not be broadcast live this year.

Primetime replays will air on the NBC broadcast network, and the entire Olympics will be available on NBCUniversal’s Peacock, the first time there will be a significant streaming presence for the games.

Bookmakers will be interested to see whether such access improves interest in betting.

Still, many in the industry see the Olympics as an opportunity to boost participation and betting in the typically slow summer months.

The two weeks of competition in Paris are a boon for betting operators, as they take place during what is typically a lull in American sports. Many leagues, including the NFL, NBA and NHL, are in the off-season.

The Olympic Games, which will be held in the summer, could also reduce competition for spectators.

Brandon Friedman, vice president of operations at PrizePicks, a daily fantasy operator that allows users to pay entry fees for competitions but is not considered gambling under federal regular law, said the company offered Olympic events in Tokyo and Beijing and learned that users prefer summer competitions.

“As a result, we are approaching the Paris 2024 Olympic Games with a broader offering than ever for our members to enjoy,” Friedman said.

The picturesque backdrop of Paris and the ability for American viewers to watch many of the competitions live during the day are also expected to boost participation.

“Beach volleyball in front of the Eiffel Tower and horse riding in the Gardens of Versailles will undoubtedly be the most spectacular scenes of recent years,” said Bichsel.

The sports included in the Summer Olympics also help. Many operators, including FanDuel and Rush Street InteractiveSportsbooks such as BetRivers expect basketball, tennis and football to be the most popular sports to bet on. It also noted that the recent surge in popularity of women's sports will likely carry over to the Olympics.

Basketball bets accounted for about half of FanDuel's bets on the Tokyo Olympics. The company expects the emphasis on basketball to continue this year, a FanDuel representative said.

In addition, the patriotism that fuels Olympic fanaticism will play a role in betting.

“Patriotism is king at the Olympics, and punters love to back their country's heroes no matter the event,” said Tim Whitehead, sportsbook director at BetRivers, operated by Rush Street.

This could also extend to betting in other countries.

“In the U.S., you see a mix of loyalties, such as when people not only support the U.S., but also have loyalty to their heritage in countries like Italy and Korea, Croatia and Brazil,” Bichsel said. “So some sportsbooks, depending on states and demographics, will respond differently to the Olympics and international gaming in general. For example, you might see an increase in betting volume from New York and New Jersey if an Eastern European country or Italy is participating.”

— CNBC's Jessica Golden contributed to this article.

Disclosure: Comcast's NBCUniversal is the parent company of CNBC.