The Daily Fantasy Sports Industry is Starting to Turn Heads
If you are an avid sports follower, have you ever wondered if there was a way to fully take advantage of your knowledge in sports? Well, daily fantasy sports probably have you covered. FanDuel is a daily fantasy sports site that takes the normal fantasy sports format, and shortens it to a day or weeklong contest. The main difference though for this site is that there are usually a buy-in fee to enter the leagues and contests. These buy-ins can range from $1 all the way up to over $5000. These contests pay out millions of dollars every year, and it provides a sort of hope to everybody playing that they can become rich fast and easily. With contests running all year for the NFL, NBA, MLB, NHL, other professional sports, and various college sports, there is never a shortage of players competing on this site.
Experts say FanDuel is worth approximately $1.3 billion. This news comes after an announcement of a $275 million partnership with KKR, Google Capital, Time Warner, and Turner Sports. Not only that, but last month FanDuel partnered individually with thirteen NBA teams for 2015-2016 season. FanDuel has increased revenue nearly 400% over the last year and brought in over 1 million unique users. Now these are pretty amazing feats since FanDuel has only been around since 2009.
These big time contracts with large corporations shouldn’t come as a surprise though. Fantasy sports have long been a commodity among sports fans, it just that these fans were always limited to season long leagues on websites like ESPN and Yahoo. There was a big enough following of these fans that ESPN even dedicated a show in 2008 titled Fantasy Football Now. The following chart from SBRnet shows how many people are fans of the following sports that play some sort of fantasy game.
(If they are an MLB fan, it doesn’t necessarily mean they play fantasy baseball. It just means that play a fantasy sport of some type.)
These numbers show that people who play fantasy sports are usually hardcore sports fans that follow multiple sports. This assumption is important to the growth of daily fantasy sports. Before these daily sites offered shortened leagues, the only real fantasy sport was fantasy football for the NFL. The reason being is that the NFL games are mostly played on Sunday, with other games in the week usually being limited to Thursday and Monday night. Couple these limited time slots with a short seventeen-week season, and you have an easy to manage league that the casual player can follow.
The NBA and MLB seasons are just too long for the average fan to pay attention to every night. This is where daily fantasy sports started to attract attention. Not only does the idea of winning money entice people to try out these sites, but also there are not season long commitments if you do enter a league. So instead of having to pay attention to 162 games for every team in the MLB, you only have to pay attention to the game being played that night.
This blog post was written by Samford University student Derek Partridge.
FanDuel Announces Series E Financing of $275 Million from KKR, Google Capital and Time Warner. (2015, July 14). July 18, 2015, http://www.businesswire.com/news/home/20150714005506/en/FanDuel-Announces-Series-Financing-275-Million-KKR#.VanBqV6prwJ
Fischer, B. (2015, January 13). FanDuel quadruples revenue, draws 1 million users in football season. July 18, 2015, http://www.bizjournals.com/newyork/blog/techflash/2015/01/fanduel-triples-revenue-draws-1-million-users-in.html