Fantasy sport an increasingly real business success

But can European operators emulate the successful American model

Frank Skinner with Statto (Angus Loughran) and David Baddiel who fronted BBC Two’s Fantasy Football League 20 years ago. Photograph: Getty

Frank Skinner with Statto (Angus Loughran) and David Baddiel who fronted BBC Two’s Fantasy Football League 20 years ago. Photograph: Getty

 

It’s over 20 years since Fantasy Football League arrived on our television screens. Frank Skinner and David Baddiel on the sofa with Statto (Angus Loughran) hovering at the kitchen counter in a dressing gown. Two decades hence, fantasy sport is big business. But can it conquer Europe?

There were over 40 million fantasy sports participants in the US in 2014, with Daily Fantasy Sports (DFS) the fastest-growing sector. Instead of choosing players and managing that team over an entire season DFS games are compressed into considerably shorter engagement times – with big money to be won.

In the US there are two main DFS players, Fanduel and DraftKings. In 2014 Jeremy Levine sold his company Starstreet, then third-placed in the market, to DraftKings. He’s now building a mobile DFS product called “Draft” which will focus on recreating the rush of the player draft, that most American of concepts, which in a season-long fantasy league would happen just once.

Picking player

s DFS company PlayOn has offices in both Dublin and London. Fantasy sport is about the social aspect, said Irish CEO Killian Jones, picking players to compete against those chosen by somebody you know.

“It’s not that you think United are going to win and a bookmaker provides odds; it’s that I’m better than you – I know more about football than you do. And this is how we prove it.”

Andy

Barcelona, Liverpool, Manchester City, Chelsea, West Ham and AS Roma have signed partnership agreements with MondoGoal, a football-specific DFS site. Like PlayOn they are licensed and regulated by the UK Gambling Commission, as is the The Daily Telegraph with their “Weekender” fantasy football product.

Squawka, the stats-centred second-screen outfit, will introduce a paid DFS product, Battle 90, for the 2015/16 football season. “It’s about that instant dopamine kick” said Squawka founder Sanjit Atwal, who considers a nine month game to be, well, boring.

Atwal said they are putting the appropriate licensing in place for DFS and will attempt to further harness their user base by opening a 45-day crowdfunding initiative in May. Minimum investment? £10.

Becoming a licensed and regulated gaming operator could raise difficult questions for a Fanduel or DraftKings. The rapid growth of the sector in the US is at least partially related to the fact that while online sports gambling is illegal there the 2006 Unlawful Internet Gambling Enforcement Act contains a specific exemption for games of skill, under which DFS operators insist they fall. Online poker fans will recall “Black Friday” – April 15th 2011 – when several large online poker operators, one of which was serviced by Dublin-based Pocket Kings, were targeted by US federal authorities. But fantasy sports is seen to be different.

It’s not as simple as calling something “Fantasy Sports” and declaring it legal. Marc Edelman, a New York lawyer with a keen interest in the legal aspects of fantasy sports, said “there are some states where the daily fantasy sports games might not meet the necessary threshold of skill, even though the makers of these games place language on their websites indicating they are 100 per cent legal”. It’s a state by state, game by game business.

Perception issues

Fanduel and DraftKings are insulating themselves against some perception issues by developing partnerships with major sports leagues and individual teams. Aside from a partnership with Fanduel, the NBA is also a shareholder. DraftKings partnered with Major League Baseball and is eyeing up a potential investment from Disney/ESPN.

“If somebody were to say ‘Hey, I really don’t like this, we should ban it’, having a league as a partner and an investor is very valuable”, said Tyrone man Nigel Eccles, the Fanduel chief who splits time between offices in Edinburgh and New York. He wants to be very open about their numbers.

“We recognise there are people who are going to have question marks about this industry.We didn’t want to look like some sort of secretive, offshore thing. We didn’t want people to have question marks about our business ethics.”

Will we see a rugby-based DFS product for this year’s Rugby World Cup? According to Opta, their agreement with World Rugby prohibits the use of that data for fantasy sports purposes. An interesting move.

DFS is changing the US sporting landscape but a real question is whether European operators can lure customers who already have easy access to online sports betting. There seem to be plenty willing to bet that they will.

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