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A seismic change in Daily Fantasy Football Business Featured Sports 

A seismic change in Daily Fantasy Football

Do you remember DraftKings and Fan Duel blowing up last year in the realm of daily fantasy football? Do you remember all of their commercials? Do you remember the promises of large cash payouts. Well here is a quick update on their state of affairs, and what you should expect this coming season in daily fantasy football.

What exactly is daily fantasy football?

Daily fantasy football is a form of fantasy football that teeters the line between skill based competition and gambling. Users pick the players they think will perform the best for an extended amount of time, and then point totals are assigned for player production. Points are awarded for yards, touchdowns, etc. The users with the post points from their players at the end of the day win large cash prizes.

Who are the companies in this industry and what problems are they facing?

Draft Kings and Fan Duel are facing a lot of heat from lobbyists and grand juries. The judicial system is upset because they think people believed they had an unrealistic view on their chances to get rich quick due in large part to the branding of daily fantasy football as a get rich quick scheme. Not to mention the fact that daily fantasy could be considered gambling in general.

Did you know that Draft kings was spending 1 million dollars per week on legal fees last year? 3 different federal grand juries are also actively pushing back against them. These grand juries are located in Boston, Manhattan and Tampa.

So where did daily fantasy football go wrong ?

Well for starters their messaging and branding were downright exasperated. I mean they ran a commercial every 90 seconds that made promises of large cash payouts. They also didn’t listen to the warnings. A lobbyist in 2013 urged them not to make their marketing all about making money. They instead sped through these speed bumps and continued the advertising. Both companies were filled with hubris.

Daily Fantasy Football

Not to mention some bad press!

Last season a draft kings employee won 350k dollars on fan duel, and DraftKings was sued for the fact that he had accessed data that wasn’t available to public. New York attorney General Eric Schneiderman issued both companies cease and desist letters. This happened in several states. New york, Texas, Nevada Etc. 10s of millions of dollars from Fan Duel and DraftKings has been spent on fees and legal battles.

Current state of affairs?

Both of these companies had Billion dollar valuations last year, and now that is up in smokes. Both companies are not profitable even though they’ve both been around for 5 or 6 years.

Makeover of daily fantasy football

The companies are going through a rebranding. Now they will be emphasizing the social side of their experience instead of large jackpot payouts. You’ll see commercials selling camaraderie, thrill, and excitement. None of them will have anything to do with money. It’ll be an experiential sell similar to what you see from Buffalo Wild Wings.

Where do I see it going? Well… A merger is inevitable

They’re fighting a battle they can’t keep up. Similarly to Sirius satellite radio and XM. They are pushing each other to oblivion. Unfortunately there is bad blood between the founders. Fan Duel was founded first, and founder Nigel Eccles said Draftkings is a clone. 

All in all, you should be expecting a completely different marketing campaign this football season. 

~Vincent Vitale

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