Daily Fantasy Sports

Daily Fantasy Sports (DFS) is a subset falling under the broader umbrella of fantasy sports. These games follow the same model as traditional fantasy sports, in which players compete against one another in assembling teams of professional athletes in a specific league and ultimately earn points based on the statistical performance of these players in their real-world competitions. Daily Fantasy Sports differ from traditional fantasy sports in their time span. Daily Fantasy Sports competitions are much quicker, often spanning just a single day or week, as opposed to the full season []. The Daily Fantasy Sports market features two main companies, the Boston based Draft Kings and the New York based Fan Duel.

Background of Major Companies

Two companies currently capture 95% of the US daily fantasy sports market: Draft Kings and Fan Duel.

Fan Duel was launched by a web based prediction company, Hub Dub, in July 2009. The platform had gained 1.2 million in funding, from the investors Pentech Ventures and Scotish Enterprises (http://dailyfantasynews.com/the-complete-history-of-the-daily-fantasy-sports-industry/). As of September 2011, FanDuel had raised $4 million more in funding and announced that they had paid more than $10 million in prizes (http://dailyfantasynews.com/the-complete-history-of-the-daily-fantasy-sports-industry/). In 2014, the investments continued to grow, as FanDuel accumulated $70 million in investments from Shamrock Capital, NBC Sports Ventures, Comcast and others (http://dailyfantasynews.com/the-complete-history-of-the-daily-fantasy-sports-industry/). In 2015, FanDuel announced they had paid out $560 million in prizes in 2014 had officially reached 1 million paid users (http://dailyfantasynews.com/the-complete-history-of-the-daily-fantasy-sports-industry/). Draft Kings was established in January of 2012 by former Vistaprint executives Jason Robins, Paul Liberman and Matt Kalish(http://dailyfantasynews.com/the-complete-history-of-the-daily-fantasy-sports-industry/) . At the launch of the platform, the company had raised 3 million in venture funding (http://dailyfantasynews.com/the-complete-history-of-the-daily-fantasy-sports-industry/). Draft Kings launched as a one-one-baseball competition at the time of MLB’s opening day (https://en.wikipedia.org/wiki/DraftKings#cite_note-boston1-4). In April 2013, Draft Kings received an undisclosed investment from the MLB. Then in July of 2014, Draft Kings elected to acquire Draft Street; this move marked the combination of the third and second largest DFS sites (https://rotogrinders.com/static/daily-fantasy-sports-timeline). This move allowed Draft Kings to increase their customer base by 50% (http://dailyfantasynews.com/the-complete-history-of-the-daily-fantasy-sports-industry/). The platform has since signed official partnerships with the NHL and MLB (https://rotogrinders.com/static/daily-fantasy-sports-timeline). In November 2016 FanDuel and DraftKings, the two largest companies in the daily fantasy sports industry, reached an agreement to merge. Pending approval by the Federal Trade Commission, the merger will close in late 2017. DraftKings and FanDuel, combined, have about 5 million users(https://www.wsj.com/articles/draftkings-and-fanduel-agree-to-merge-1479479405).