In case you’ve missed it, Daily Fantasy Sport (DFS) could be one of the next big things on this side of the pond. After explosive and very rapid growth in the US, DFS is now looking to export its success to the UK, with DraftKings recently signing partnership agreements with Arsenal, Liverpool and Watford. DFS involves selecting Fantasy Sports Teams, with an entry fee and prize money that can reach millions of dollars. As I said back in 2014, gamification of sport is a huge industry, and the dramatic growth of DFS is testament to this.
DraftKings and FanDuel are the industry leaders in the USA, following an ad blitz, several high-profile sponsorships, and a number of legal battles. At the heart of these battles is whether Daily Fantasy Sports should be viewed as gambling or not. Joe Asher, William Hill CEO, feels that DFS “is gambling and it should be regulated as such”, although you can understand why an established betting firm would feel that way.
Both DraftKings and FanDuel have courted controversy in the USA through high profile advertising and sponsorship campaigns, running a TV advert every 90 seconds, spending a combined $150m in Q3 of 2015. The ubiquity of the adverts caused a backlash in November (illustrated below) from viewers and sports fans, but some argue that it has only alienated those who would never use the service, doing little damage to the business itself.
Beyond the plethora of team and league sponsorships, DFS providers have partnered with major events such as the Belmont Stakes (presented by Draft Kings) and Stadium Lounges like the Draft Ops Ice Club and the Draft Kings Fantasy Lounge, which will “give visitors an interactive place to gather and play DraftKings”. The deliberate move to partner with teams, leagues, events and lounges has caught the eye to the extent that it is hard to avoid the presence of DFS providers in the USA. Primetime sponsored shows such as NFL Insider on ESPN have been compared to “a DraftKings infomercial disguised as a pregame show“. For those in the UK who watch Premier League football, it’s similar to the pervasive presence of betting firms.
It might not be a popular, or progressive method of brand-building, but this ubiquitous brand presence across sporting and media platforms has quickly established DraftKings and FanDuel as the dominant players. As is often the case, sponsorship has been used to legitimise their brands, but this may all be in vain if they lose their legal battle in the US - it is perhaps telling that at this stage, the NFL have opted against signing a partnership with either FanDuel or DraftKings.
The expansion of DraftKings into the UK could also inadvertently jeopardise their domestic operations, due to the requirement of a gambling licence through the UK Gaming Commission. Obtaining this could be seen as an admission that DFS is indeed gambling, and that won’t have gone unnoticed by Attorney Generals across America. As payment processors step away from DFS providers, international expansion can be seen as spreading risk, in case of protracted legal battles in the US.
Whilst DraftKings and Fan Duel are available as an alternative to gambling for Americans, it will be tougher for DraftKings to cut through and at the same time differentiate their offer in a mature betting market like the UK. Given how commonplace betting adverts are, achieving both cut-through and differentiation will be difficult, as it is now possible to bet on Fantasy Football, to receive tips on your Fantasy Football team from betting firms or play Fantasy Football for cash prizes.
Having announced Arsenal, Liverpool and Watford partnership deals in February, we are yet to see DraftKings make much of a move on the UK market…and they are not even listed as a partner on the website of the latter two clubs. Given the popularity of Fantasy Football in the UK and an established gambling market, it is surely only a matter of time until we see DraftKings make their mark here. If their approach is anything like their domestic strategy, you’re unlikely to miss it.