iGB North America magazine IGBNA Aug/Sep | Page 46

Management & Marketing

THE CHANGING DFS LANDSCAPE
Despite DraftKings and FanDuel’s dominance, the huge growth and potential of
daily fantasy sports in the US means there’s still plenty of room for alternative
brands to enter and build a business in the space, as Alana Levine of Income
Access Group explains.
Daily fantasy sports’ revenue reached an
unprecedented $86 million in 2014. However,
the vertical’s best years are likely yet to come:
the market could potentially expand to $2.5
billion by 2020, according to Eilers Research.
As operators count down to the start of
the 2015 NFL season and therefore the DFS
year on September 10, they’ll be focusing on
how the vertical’s next 12 months will play
out. With new operators entering the market
and with brands keen to broaden their
player bases, the year looks set to be all about
diversity – at a product and a marketing level.

Out of the park: fantasy rising
Fantasy in 2015 looks vastly different from
its early days in 1980s New York as Rotisserie
League Baseball. Along with the web’s
inexorable rise in the late 1990s, two key

clampdown on real-money iGaming. Just
as importantly, UIGEA allowed fantasy sites
to offer cash prizes as long as these were
predetermined before contests began.
Following Washington’s tacit approval
of fantasy sports with real-money prizes,
individual states mostly followed suit. All
but five states – Arizona, Iowa, Louisiana,
Montana and Washington – today allow
their residents to play paid fantasy sports.
The one-day fantasy revolution is the
second event that helped transform the
sector into a market that today boasts 42
million adult Americans, according to the
Fantasy Sports Trade Association (FSTA).
From 2009, brands like FanDuel and
DraftKings began offering players contests
that took place over a single day or, for the
NFL, a weekend.

“Trends show that season-long fantasy players and
casual sports fans new to fantasy are deterred by
complex DFS products and by their lower chance
of winning prizes against DFS pros.”
events helped transform fantasy into the
multi-million dollar industry we know today.
The first watershed moment came in
2006, when the Unlawful Internet Gambling
Enforcement Act (UIGEA) defined fantasy
sports as games of skill rather than chance.
This exempted fantasy from the government’s

The immediacy of playing daily fantasy
events and the size of the prizes offered –
FanDuel estimates it will pay out $2 billion
this year alone – has ensured that DFS is
the motor driving the growth of the wider
fantasy industry. Nine million new DFS
players have entered the market since 2013

46 | iGamingBusiness North America | Issue 20 | August/September 2015

versus only 2.8 million season-long players,
according to IPSOS.
Nonetheless, even if DFS is growing at a
record rate, the market’s potential remains
equally huge. Over 26.4 million US seasonlong fantasy players have never played DFS,
according to IPSOS. Before targeting players
completely new to fantasy, operators are
therefore focusing on acquiring these already
familiar players.
Aside from their interest in fantasy
sports, traditional fantasy players are
high-value customers. They tend to be well
educated with high incomes: 57% hold a
bachelor’s degree or higher, while 47% have
a household income in excess of $75,000,
according to the FSTA. Given that players
trend younger – the median age is 37.7 –
player lifetime values are also high.
Considering the DFS market’s potential
and the quality of players, ]8