New Deals for FanDuel and DraftKings
DraftKings and FanDuel are already the two biggest names in daily fantasy sports, but in the last month the operators have taken steps to expand further. While DraftKings has signed two new deals to further its reach, FanDuel has launched a sportsbook in Pennsylvania. Both are important moves for the companies and could have a big impact on the sports betting and fantasy sports scene.
Daily fantasy sports (DFS), for those who haven’t played, are similar to any other kind of fantasy sports but played on a faster timeline. Players build teams of athletes from a particular sport and league while staying within a set salary cap and then earn points based on real statistical information from real-world competitions. While fantasy sports generally last for a full season, DFS contests usually take only a day, or sometimes a week. While the legality of DFS has been highly debated in the USA, it is playable in all but nine states. Eighteen states have determined that DFS is entirely legal, ruling that it is a game of skill and not luck, so it should not be considered gambling. In many other states, no legislation has been passed to either outlaw or formally legalise DFS, so residents are able to play without fear of prosecution.
Two Deals for DraftKings
DraftKings is currently the largest daily fantasy sports sites. In November 2016, it reached an agreement to merge with the FanDuel but this was blocked by the Federal Trade Commission as the combined company would have controlled a 90% market share. In July 2017, DraftKings had eight million users, and that number has continued to increase.
Major League Baseball
DraftKings has announced that it has expanded its multi-year deal with Major League Baseball. The company now has the right to use official league data and logos in its sports betting products, as it is now MLB’s “Official Daily Fantasy Game”. DraftKings can now offer market-specific in-ballpark experiences. A joint statement from MLB and DraftKings says that the deal marks “most comprehensive league partnership in daily fantasy sports history.”
It is, perhaps, unsurprising that DraftKings was the site chosen for this deal since it has ties with MLB going back to 2013. MLB bought a small stake in DraftKings when it was still a small daily fantasy start up. Despite the new relationship between the two, DraftKings will still be required to approach individual teams on a team-by-team basis to develop fan contests.
This deal is MLB’s second sports betting partnership; the first was last November with MGM Resorts International. It is expected that more sports gambling agreements will be announced by MLB in the coming weeks.
DraftKings has strengthened its league-level partnership with MLB with this deal, and still maintains a relationship with the National Hockey League as well. Its biggest competitor has a partnership with the National Basketball Association, but the National Football League has yet to broker an exclusive relationship with any one daily fantasy sports operator.
The second deal struck this week is between DraftKings and the PGA Tour. A “content and marketing relationship” has just been announced which is essentially a deal to brand DraftKings’s daily fantasy golf product as the tour’s official offering.
While all the terms of the deal have not been disclosed, some details have emerged. The PGA Tour will provide DraftKings with real-time video highlights for golfers in customised line ups, real-time product enhancements, and expanded DFS content offerings. Luis Goicouria, the PGA Tour Senior Vice President, has said, “We are excited to partner with DraftKings, an industry leader in innovation and fan engagement, in this ground-breaking step for the PGA Tour. The partnership with DraftKings provides the Tour with a unique opportunity to innovate in a new industry and to further engage our fans.”
DraftKings highlighted the popularity of daily fantasy golf in its press release regarding the deal. Golf is currently fourth in popularity out of the fifteen different offerings on the site. 30% of DraftKing’s 11 million customers have played DFS golf, and entries topped 20 million last year.
FanDuel Sportsbook Goes Live in Pennsylvania
It has only been a few weeks since FanDuel announced that it had entered into a multi-year sponsorship agreement with the Breeders Cup, a prestigious international racing event. Now, FanDuel Sportsbook has launched, making it one of the early leaders in the ever-expanding US sports betting market. Testing on both the website and mobile app was completed two weeks ago and after a successful soft launch, the platform is now fully up and running. It is the fourth online sportsbook to launch in Pennsylvania after SugarHouse, BetRivers, and Parx, but is the only one with a standalone iOS app.
The PA Sportsbook looks a lot like the New Jersey Sportsbook which has been extremely popular in that state. FanDuel has had close to a monopoly on the New Jersey market for most of 2019 with its online and land-based sportsbooks near New York City. Taking a look at New Jersey, the importance of mobile betting is clear; more than 80% of bets come through sports betting apps in NJ. FanDuel is the second largest daily fantasy sports operator in the USA based on entry fees and user base. It was founded in 2009 and was bought by Irish/British bookmaker Paddy Power Betfair in 2018. Later that year, FanDuel became the first official daily fantasy sports and sports betting partner of the National Hockey League.