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 [[1]]. The Daily Fantasy Sports market features two main companies, the Boston based Draft Kings and the New York based Fan Duel.
Contents
Gameplay
Gameplay: Daily Fantasy Sports are offered for a variety of leagues including: NFL, MLB, NBA, NHL and even less popular leagues like MMA or CFL. [[2]]
There are two main categories of daily fantasy sports: cash games and tournaments [[3]]. In cash games player’s who outscore at least 50% of the competition are deemed as winners. These winners receive a payout of roughly double their entry fee. Tournaments typically pay out entrants who score in the top 20% [[3]]. In both cases, entrants who are below the given threshold lose their entire entry fee.
In each of these play styles; entrants assemble a team of professional athletes who have each been assigned a cost. These entrants must strategically assemble a team that does not exceed the “Salary Cap” constraint; which is the maximum amount a team’s player cost can sum up to [[4]].
Background of Major Companies
Two companies currently capture 95% of the US daily fantasy sports market: Draft Kings and Fan Duel [[5]].
Major Companies
Fan Duel
Fan Duel was launched by the web based prediction market Hub Dub Hub Dub , in July 2009. FanDuel has partnerships with the NBA and multiple individual NFL/NBA clubs [[6]]. FanDuel generated $1.8 billion in Revenue over 2015 [[7]].
Draft Kings
Draft Kings was established in January of 2012 by former Vistaprint executives Jason Robins, Paul Liberman and Matt Kalish. Draft Kings has partnerships with the MLB, NFL Players Association, MLS, NHL , and many individual teams [[6]]. DraftKings generated 1.6 million in revenue in 2015 [[7]).
Merger
After facing similar regulatory and legal challenges, FanDuel and DraftKings reached an agreement to merge [[8]]. DraftKings Chief Executive Jason Robins will serve as CEO of the new company, while FanDuel chief Nigel Eccles will be chairman [[8]]. Robins stated that merging will allow the companies to pursue innovative ideas by freeing up capital [[8]]. Pending approval by the Federal Trade Commission, the merger will close in late 2017 [[8]].
- ↑ Wikipedia Page: https://en.wikipedia.org/wiki/Daily_fantasy_sports
- ↑ Draft Kings Site https://about.draftkings.com/
- ↑ 3.0 3.1 Rotoworld Guide http://www.rotoworld.com/articles/nba/48892/425/cash-games-vs-tournaments
- ↑ Salary Cap Explanation http://venturebeat.com/2015/09/10/how-to-make-a-killer-daily-fantasy-sports-football-roster-on-draftkings-and-fanduel/
- ↑ Advertising Age Publication: http://adage.com/article/media/draftkings-fanduel-spe/300658/
- ↑ 6.0 6.1 Partnerships http://www.legalsportsreport.com/dfs-sponsorship-tracker/
- ↑ 7.0 7.1 Revenue Report: http://dailyfantasynews.com/fanduel-collected-600-million-more-in-entry-fees-than-draftkings-in-2015
- ↑ 8.0 8.1 8.2 8.3 Partnerships http://www.legalsportsreport.com/dfs-sponsorship-tracker/
