DraftKings (DKNG 1.15%), fuboTV (FUBO -1.51%), and Penn National Gaming (PENN 2.13%) are all vying for a piece of the lucrative mobile sportsbook market. Each has different assets to tap into, but which one offers the best odds of investing success?

Ever since the repeal of the Professional and Amateur Sports Protection Act, states across the U.S. have been legalizing sports betting. Companies are jockeying for positions in this new market estimated to be worth $22 billion annually (if all 50 states legalize the activity). With each state selectively handing out licenses to only a few providers, companies receiving the licenses could be getting a sustainable, legally enforced competitive advantage in each state that protects the winners from too many new entrants. 

Let's look at what each of these three companies has going for it in this market share wager. 

Three people on their smartphones.

Image source: Getty Images.

fuboTV 

fuboTV is a sports-centric video streaming service alternative to cable TV. The company has 590,000 paying subscribers, many with a higher-than-average interest in sports programming. It makes sense, therefore, that fuboTV is launching a mobile sportsbook. Fans who watch sports are more likely to wager on sports. And management believes this will be a distinct competitive advantage against other companies that offer mobile sports betting.

Here's what fuboTV's CEO David Gandler said about the situation on the company's most recent earnings conference call:

We believe we'll have a very distinct advantage compared to sportsbooks that are partnering with media and distribution companies. Uniquely, fuboTV will look to combine streaming and gaming under one data analytics platform, delivering a holistic and seamless user experience with lower cost of acquisition. 

Management is certainly optimistic, but the company has yet to build out its service. Hence, it remains to be seen if it will integrate the two segments of its business successfully. 

Penn National Gaming 

Penn National Gaming operates several regional brick-and-mortar casinos across the U.S. It believes its relationship with casino visitors gives it a leg up on attracting players to its mobile sportsbook. 

The company's loyalty app for players has been downloaded 333,000 times. Its players have proven to enjoy placing wagers, and already have the company's app on their phones. Giving these players a little nudge to join its mobile sportsbook could turn out to be less costly than other forms of marketing.

Moreover, every time a person visits one of its physical casinos, Penn can cross-sell them to the mobile sportsbook. 

DraftKings 

DraftKings has been running a daily fantasy sports (DFS) website for nine years, allowing it to amass a database of 5 million players. Interestingly enough, the company has been able to cross-sell 60% of its DFS players within 12 to 18 months of a new state legalizing online sports betting.

The staggeringly large number of DraftKings players and the high rate at which the company can convert them into mobile sports bettors gives it the best advantage against the competition.

Investor takeaway

Still, the industry is young, and things may turn out a lot different than expected. Investors looking for stocks that can benefit from the expansion of mobile sports betting have three viable options in DraftKings, Penn, and fuboTV. In keeping up with the sports betting theme, the favorite to win here is DraftKings and the long shot is fuboTV.