Fantasy Sports Special – Part 1: Draftkings builds on sport’s ‘social’ side

Fantasy Sports Special – Part 1: Draftkings builds on sport’s ‘social’ side

Monday, February 23, 2015 Totally Gaming

Anyone with an interest in US sports will have noticed a recurring theme in recent months. Every day it seems that another major sports franchise has signed a partnership with a fantasy sports operator.

The franchises and daily fantasy sites – through which participants pay a fee to create teams that compete for prizes against one another with player statistics generated from one day or weekend's games – cannot get enough of each other.

Draftkings is one such operator. In recent months, it has signed up with NBA basketball teams the Philadelphia 76ers, Boston Celtics and Houston Rockets, while it also has agreements with the NHL ice hockey and MLB baseball leagues and a number of NFL American football franchises.

While there are similarities between sports betting and fantasy gaming, there's a clear difference - one is illegal, the other legal as defined by the  controversial Unlawful Internet Gambling Enforcement Act (UIGEA) 2006, which was effectively the death of online gambling in the US but probably the defining moment in the rise of fantasy gaming.

The bill specifically exempted fantasy sports games, or any online contest that "has an outcome that reflects the relative knowledge of the participants, or their skill at physical reaction or physical manipulation (but not chance), and, in the case of a fantasy or simulation sports game, has an outcome that is determined predominantly by accumulated statistical results of sporting events, including any non-participant's individual performances in such sporting events".

The enactment of UIGEA gave the first legal definition of fantasy sports around which operators could then develop games, and the industry began to grow in 2007, as outlined by Femi Wasserman, Draftkings’ vice-president of communications.

“The growth in popularity can be tied to the unique space that daily fantasy fills for sports fans,” Wasserman told TotallyGaming.com.

“Daily fantasy sports take many of the components of standard season-long fantasy sports and compress them into a shorter time period, such as a week or a few days.

“If you're a die-hard season-long player, daily fantasy offers the opportunity to stay in the game, and the constant excitement of a new draft. 

“If you are a casual fan, you don't lose anything by taking some time off and coming back to play when you can. Daily fantasy really fills a unique experience for sports fans.”

The popularity of daily fantasy sports has more than tripled in each of the last three years. Over the past year, cumulative player entry fees have more than quadrupled to $1bn (€820m) from $245m. Eilers Research LLC, in a study released in October 2014, called fantasy gaming a "cultural phenomenon" and said that entry fees in the segment will rise 10-fold to almost $11 billion by 2018.

“Professional sports have become more social, allowing fans to engage with the teams and players they are passionate about. Many NFL, MLB, NHL, and NBA teams have recognised that fans in the stadium are participating in fantasy sports and have partnered with us to provide them with the most up-to-date information,” Wasserman added.

“It’s a tremendous, mutually-beneficial opportunity for teams to enhance the in-game experience for fans while introducing daily fantasy sports and DraftKings to them.”

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