Disney's DraftKings decision based on DFS image concerns

Disney's DraftKings decision based on DFS image concerns

Tuesday, July 14, 2015
CEO Jason Robins believes DraftKings was at odds with Disney's image

Disney chose not to invest in daily fantasy sports (DFS) operator DraftKings last month as it did not fit in with the entertainment company’s family-oriented image according to a report in the New York Times newspaper.

The story claims that Disney consulted legal experts about a possible $250m (€227.2m) investment that would buy around 20 per cent of DraftKings. However, while discussions backed up the legal basis of the burgeoning fantasy sports sector, Disney emerged in late June with concerns that financial association with DraftKings might damage its reputation.

“The way they put it to me is that DFS is an adult product that doesn’t necessarily fit in with their brand,” Jason Robins, chief executive of DraftKings, told the New York Times.

Fantasy sports are defined and exempted by the 2006 Unlawful Internet Gambling Enforcement Act (UIGEA) from federal law that bans online gambling. However, paid-for DFS games are not allowed by state law in Montana, Louisiana, Washington, Iowa and Arizona.

While Disney did not invest in DraftKings, the operator has become the official daily fantasy sports offering of sports network ESPN, owned by Disney.

There are no shortage of sports-related organisations more than willing to sign partnerships with DraftKings and the company this week has added to its numerous sports franchise link-ups by becoming the exclusive DFS Partner of Staples Centre in Los Angeles.

The arena is the home of NBA basketball teams Los Angeles Lakers and Los Angeles Clippers and the NHL ice hockey franchise Los Angeles Kings, and hosts major events such as the Grammys and concerts.

As well as prominence in the Staples Centre, DraftKings – which already has a similar deal with New York’s Madison Square Garden - will benefit from the 4,400 square-foot DraftKings lounge, which is set to open in September.

“With the opening of our first DraftKings Fantasy Sports Bar & Lounge of its kind, we are creating the premier destination for Los Angeles sports fans to watch games, play daily fantasy and socialise over great food and drink,” Robins said in a press release.

“We will bring DraftKings players closer to the action each day with live broadcasts, VIP experiences, special guests, and ticket giveaways.”

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