INSIGHT
“I think more volatility is actually good thing,
as it gives less skilled players better chances
and odds.”
it is a relatively young audience compared
to the general population for traditional
sports. They are predominantly male,
north of 80%, maybe 85%, and tend to
skew young, younger than their sports, and
they just watch online, so rarely switch on
the TV. They are also pretty sophisticated,
being gamers themselves, playing some
kind of game for a significant number of
hours a week, or following the eSports
scene for a number of hours a week. One
of those two things is typically required
for you to be involved in fantasy sports,
because if you are not following the scene,
you are just not going to be interested in
drafting a team.
The investors are here for the long term,
and the prize money doesn’t really come
from the investment per se, it comes from
the entry fees that people deposit in order
to play games. For example, say there’s
a tournament happening and people put
in $10,000 in entry fees, we keep a small
commission on that and the rest is returned
in prizes to players, so that counts towards
the prize pool. The investor money just
helps us be able to make that commitment,
and guarantee that.
When we started off, we were essentially
just using the DraftKings, FanDuel model,
so it’s daily, and everything is locked at the
start of the day, and you can’t do anything
till the end of the day. And it’s very hard
to improve upon that model, because daily
fantasy, at least the money part of it, is
highly regulated. You can’t do betting, you
can’t do results from just one match, they
have to be a set of matches, and there are
all these other provisions in the UIGEA
that are specific to fantasy. So it’s been hard
to change that model for real-money. So
what we’ve done is to have in-game betting
today, using virtual points, so not cash.
So, say you draft your real-money roster,
and you are watching the game, and in
between you have all these chances to
win virtual prizes by correctly picking
the next event that’s about to happen,
i.e. which player is going to get the first
kill, A or B?, or who is about to hit a
certain objective in the game, that is
three minutes away. So, there’s as lot
of in-game stuff we do, and it’s very
instant, and as far as I know, we are the
only site doing that. But I don’t think
you can do that with real-money due
to restrictions under UIGEA, so that is
why we are not touching that, and have
firewalled the system, so that all the new,
innovative stuff is being done with virtual
currencies, and all the traditional DFS
stuff is done with real-money.
At present, team selections are
locked and no substitutions
are allowed once contests are
underway. Can we expect to see
you introduce elements of inplay to the model, i.e. with player
I’ve read that the favourites
win less often in eSports than
traditional sports, making for
more volatility. Is this actually
true, and what issues does this
present you with?
On your website it says that $10m
of the $13m VC funding is offered
in prizes. Does this place you
under pressure to start funding
prize pools from sustainable
revenue streams within a certain
time frame, or are your investors
taking the long view as they are
with DraftKings and FanDuel?
68
values changing during the game
in line with their performance,
allowing customers to draft in
response to injuries etc?
iGB Affiliate Issue 52 AUG/SEP 2015
This is true. It’s built into the model, so
the salaries adjust based on performance.
It does make things more interesting, as it
gives less skilled players more of a chance
to win, whereas in traditional sports, if you
do your research, it’s easier to continue
winning as a fantasy sports player, because
these things are very skill-based. You
will see the same people winning again
and again, week after week, and accrue
larger and larger balances, unlike games
of chance like roulette, where anyone can
win on any roll. I think more volatility is
actually good thing, as it gives less skilled
players better chances a