Posts Tagged ‘DraftKings’

DraftKings, FanDuel to Merge

 DraftKings, FanDuel to Merge

We all knew it was coming, but on Friday morning, DraftKings and FanDuel announced that they have agreed to a merger, a deal which will create a company that will have a virtual monopoly on the daily fantasy sports industry.

Per the press release, DraftKings CEO Jason Robbins will be the new company’s Chief Executive and FanDuel CEO Nigel Eccles will be the Chairman of the Board. The Board of Directors will consist of three people from each of DraftKings and FanDuel with one independent director.

No financial terms have been released, but ESPN.com’s David Purdum reported that sources close to negotiations have indicated that the merger will likely be 50/50.

The companies cite “operational efficiencies and cost savings” as benefits of the merger, as well as the ability to allow for a “greater focus on developing new products and features, including more variety in contest formats, loyalty programs, enhanced social functionality and ancillary sports-oriented content and experiences, all aimed at creating a more diverse, exciting and appealing experience for fantasy sports players and all sports fans.”

Of course, the former rivals also see the merger as a vehicle towards quicker profitability, as well.

The press release continued:

The combined company will be able to invest in strategic partnerships across the sports ecosystem. Media, advertising and other partners will benefit from access to more products and customers as a result of DraftKings and FanDuel’s diverse user base and league relationships, as well as increased investment in advertising. Together, the combined entity can accelerate growth of the fantasy sports category, drive broader and deeper fan engagement, and more efficiently reach those players.

One of the major cost savings that people around the industry are looking at is a reduction in combined legal costs. Both companies have been engaged in legal struggles and lobbying efforts on the state level, draining their coffers of funds to the point where it has been reported that they are having trouble paying the bills. Combining forces allows them to eliminate many of these redundant costs.

Interestingly, at least one competitor hopes the merger passes regulatory hurdles. DRAFT founder and CEO Jeremy Levine told ESPN.com that he essentially sees the combined company being able to pave the way for the “little guys.”

“Prior to the tumult of the past year, FanDuel and DraftKings were well on their way to becoming multibillion-dollar pillar business[es] in sports,” he said. “There still will be massive business built in this space, but it won’t be FanDuel or DraftKings individually. Due to the merger, the opportunity is now there for the few companies that were able to survive and strengthen in the past year.”

If the merger gets the ok from regulators – and that’s a big “if,” considering DraftKings and FanDuel own around 90 percent of the daily fantasy sports market – the deal is expected to be completed in the second half of next year. In the meantime, the two sites will continue to operate separately. At this time, it is not known what the name of the new company will be.

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DraftKings Launches Leagues

 DraftKings Launches Leagues

Love daily fantasy sports but aren’t thrilled with the “daily” part of it? Well DraftKings has just the thing for you. Kind of. It is still “daily” fantasy sports, but DraftKings’ new “Leagues” injects the added twist of being able to play all season long with your buddies!

Traditional fantasy sports are great fun. You get together with your friends for the draft – mostly online nowadays, but many still make a holiday of it and have a live draft bash – and then spend the entire season talking trash and offering up ludicrous trades. Amongst friends, even fantasy leagues (known as “rotisserie” leagues back when I was a youth) played for no money can be a blast, as off-season bragging rights make the champion feel superior to his stupid opponents.

In daily fantasy, though, that camaraderie, that friendly hatred, isn’t there. Instead, it is actual hatred, as all of your opponents are strangers and all obviously cheating because there’s no way anyone know Marcus Mariota was going to go off like that. The personal fun of fantasy is gone with DFS, though you also don’t have to deal with people dropping out over the course of the year (or you yourself can stop playing with no repercussions).

DraftKings aims to bring the best of both worlds together with Leagues. Anyone can start a league on DraftKings and invite friends to join. From there, the members of the league play in DFS contests selected by the league’s commissioner, just as they might normally. The games can be for money or can be for free, whatever everyone agrees upon. And that’s really the gist of it – play DFS against your buddies year-round.

There is no requirement for players to participate in every contest in their league. Of course, they won’t have the chance to climb their league’s leaderboard and earn bragging rights if they don’t play frequently, but that’s really up to the players and how they want to handle shame. Commissioners can also setup recurring contests so that everyone knows ahead of time what to expect.

There’s not much to Leagues, but it sounds like a pretty cool offering. I mean, might as well, right? And what’s nice is that it’s not like it will get in the way of the regular contests; aside from a player’s DFS budget, there’s no reason someone can’t participate in a league and play in their normal GPP’s and what-not. For DraftKings, it will not only likely result in happier players, but should also bring new customers to the table. Players can invite their friends to their league via text, e-mail, Facebook, and Twitter, and those invitees don’t need to be current DraftKings customers to receive the invite. Thus, Leagues will inevitably get new people aboard the DFS train.

Leagues launched on Tuesday, just in time for the start of the NFL season, which is less than a month away.

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Canadian Football League, DraftKings Forge Partnership

 Canadian Football League, DraftKings Forge Partnership

For American sports fans, this time of year is the doldrums of the sports calendar. The professional hockey and basketball seasons just ended (college seasons ended a while ago), college football is two months away, and the NFL season is more than two months away. Right now, it’s just baseball, which is cool and all, but the middle of the baseball season just doesn’t excite. Last week, though, was the opening week of the Canadian Football League (CFL) and with it came a new alliance between the CFL and DraftKings.

Just in time for the opening kickoff, DraftKings launched CFL contests, the centerpiece of which was the CFL $ 50K Kickoff Special, featuring a $ 50,000 guaranteed prize pool, a $ 5,000 first prize, and payouts down to 435 spots. The usual types of games were all there, from 50/50’s to heads-up matches to smaller guaranteed prize pool contests. Scoring format is similar to what players should be used to from American football games with some slight adjustments for the differences between the NFL and CFL.

The CFL also announced that it has entered into an advertising and promotional agreement with DraftKings.

“We’re pleased to form an advertising and promotional partnership with DraftKings that will elevate both of our brands,” CFL Senior Vice President of Marketing and Content Christina Litz said in a press release. “This new fantasy offering will give avid CFL fans and sports fans new to our league an opportunity to deepen their engagement with our game. It’s an important part of our strategy to serve our existing fan base better than ever before at the same time we attract new fans, including the next generation of fans.”

The key here is the CFL using this relationship to attract new fans. While the National Football League has been popular for decades, its rise to the top of American professional sports and into the immortal beast that it is has a lot to do with sports betting and fantasy sports. Football is by far the most popular sport on which Americans wager – much of that has to do with the infrequency of games and a scoring system that lends itself perfectly to spread-based betting. It is this gambling, combined with season-long fantasy – and now daily fantasy – that has driven much of the popularity of the game. Betting and fantasy sports give non-fans something to pay attention to and fans of single teams (as most of us are) an interest in all of the games, even ones between two terrible teams.

With this partnership, the Canadian Football League is attempting to follow in the footsteps of the NFL, even if that footstep is much smaller and way behind. Most Americans know nothing about the CFL, except that it is a league populated by players who couldn’t make NFL teams. But if CFL contests can attract any sort of reasonable percentage of DraftKings players, the league could see an uptick in its viewership, traffic to the league website, and the like as fantasy players investigate CFL games more.

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DraftKings, FanDuel to End College Sports DFS Contests

 DraftKings, FanDuel to End College Sports DFS Contests

This weekend marks the end of the college basketball season and with it, the end of college sports contests on daily fantasy sports (DFS) sites DraftKings and FanDuel. The two DFS leaders announced Thursday that after Monday’s championship game of the men’s NCAA basketball tournament, they will cease offering contests on college sports.

Gambling on college sports, while extremely prevalent, has always been more controversial than gambling in professional sports. And since many (most?) people consider DFS gambling, DFS games based on college sports have been a sticky issue.

According to ESPN.com, though, the decision to stop college sports contests shouldn’t hurt the daily fantasy sports sites. College basketball and football combined make up only 3 percent of FanDuel’s revenue. As ESPN.com put it, “the NFL daily fantasy market is 10 to 20 times larger than the college football market.”

In a statement posted on its website, FanDuel said of the decision:

As a leader in calling for smart, common sense regulations for the fantasy sports industry, FanDuel has had months of productive conversations with the NCAA, their member institutions, and various state legislators to better understand their concerns around fantasy sports contests based on amateur athletics. It is clear that this is an issue that matters to a variety of constituencies and we feel that the best path forward is to suspend offering these contests pending resolution on the issue within state legislatures.

It added:

The NCAA’s home state of Indiana and our home state of New York were two of the first states to take up this debate. Indiana has passed and New York is considering fantasy sports laws that protect consumers, protect the right to play fantasy sports, AND contain carve-outs stating fantasy contests involving amateur sports are barred in their states. The Massachusetts Attorney General issued regulations with a similar carve-out. We supported all of these efforts, and going forward we will actively support bills containing the same provisions. We are pleased that we can work together with the NCAA on smart regulations for the fantasy sports industry.

In a statement published by ESPN.com, NCAA president Mark Emmert expressed his gratitude for the concession made by DraftKings and FanDuel:

We appreciate and commend DraftKings and FanDuel’s action to stop offering contests involving college, high school and youth sports,” NCAA president Mark Emmert said in a statement issued Thursday. “This action culminates months of hard work between all parties to reach a place that is good for amateur sports and most importantly, the young people who participate. We will work diligently with our member schools over the coming year to ensure such amateur sports ‘carve outs’ are included in pending states’ legislation.

As FanDuel mentioned, of the three states that have enacted DFS regulations, Massachusetts and Indiana have specifically included language that prohibits DFS sites from offering contests on amateur sports, which includes college sports. ESPN notes that of the 30 states to introduce DFS legislation this year, though, only five have included a ban on college sports.

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DraftKings, FanDuel Reach Settlement with NY AG, Will Cease Operations in NY

 DraftKings, FanDuel Reach Settlement with NY AG, Will Cease Operations in NY

On Monday, DraftKings, FanDuel, and the New York State Office of the Attorney General announced that they have reached a settlement in the legal battle over daily fantasy sports (DFS) in the Empire State. In exchange for the two DFS leaders withdrawing from the New York market until at least September, NY AG Eric Scheiderman has agreed to drop most of the charges against the two companies.

The reason September is key for DraftKings and FanDuel is because their appeal regarding the legality of DFS is scheduled to be heard that month. If the Court rules that DFS is, in fact, legal in the state, then one would assume that DraftKings and FanDuel could get right back to offering real money contests.

In the meantime, there are DFS bills circulating in the state legislature. According to the terms of the settlement, if one or more of the bills pass by the time the Senate and Assembly adjourn on June 30th, therefore legalizing DFS, then the lawsuits/charges levied against DraftKings and FanDuel by the New York Attorney General will be dropped except for the charges of False and Misleading Advertising.

If the Attorney General Schneiderman wins the appeal in September, DraftKings and FanDuel have agreed to do away with their lawsuits and appeals. The AG will do the same, but the false advertising charges will stick.

The sites have also agreed to process withdrawal requests from customers within seven days of when the requests are made. It appears that customers of the two sites can choose to keep their funds on deposit if they wish so that they can play in real money games if they find themselves logging in from a state in which the sites are still active. The sites are permitted to host free contests and can award prizes, as long as players are not required to pay an entry fee.

FanDuel posted a statement on its website, explaining the situation. The statement reads, in part:

New York is a critical state for FanDuel. FanDuel is headquartered in Manhattan, where we employ more than 170 young, smart, passionate fans who are committed to innovating and providing the best fantasy experience possible. We are proud to be one of New York’s largest startup companies, and while it is disheartening for us to restrict access to paid contests in our home state, we believe this is in the best interest of our company, the fantasy industry and our players while we continue to pursue legal clarity in New York.

DraftKings did, as well:

We are an industry leader in technology, innovation and consumer protections, and we are grateful to the hundreds of thousands of New Yorkers who have enjoyed playing fantasy sports on DraftKings for the last 4 years. We will continue to work with state lawmakers to enact fantasy sports legislation so that New Yorkers can play the fantasy games they love.

On the other side, Attorney General Schneiderman celebrated:

I’m pleased to announce that both FanDuel and DraftKings will stop taking bets in New York State, consistent with New York State law and the cease-and-desist orders my office issued at the outset of this matter. As I’ve said from the start, my job is to enforce the law, and starting today, DraftKings and FanDuel will abide by it. Today’s agreement also creates an expedited path to resolve this litigation should that law change or upon a decision by the appellate division. Regardless, our key claims against the companies for false advertising and consumer fraud are not affected by the agreement and will continue.

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