The company that transformed how fans engage with sports, DraftKings, is celebrating its five year anniversary since launching in 2012. With the rise of daily fantasy sports, DraftKings reports that nearly 80% of players have increased their sports content consumption and that two-thirds of its customers say that they play DFS because it makes watching sports more enjoyable. Other data points also show, according to the company, that 60% of DFS customers report watching games involving teams they don’t usually follow because they are following their fantasy players while 60% of fantasy sports contestants also say they watch more live sports and read more articles about sports since they started playing fantasy contests. Finally, 41% of DraftKings contestants report watching more sports specific TV programs as a result of playing on DraftKings.
As the company celebrates five years, Cynopsis Sports asked Paul Liberman, COO of DraftKings, about the company’s whirlwind half-decade, its merger with FanDuel, legal battles, and what to expect over the next few years.
Liberman on when he knew they were big: It’s hard to point to one, but if I had to it would have to be the first fund raising where we were able to focus on this full time. We had been spending most the last 6-8 months working in my spare bedroom and getting some traction but weren’t going to really be able to scale if we continued to work on it on the side. Our company really took off when we got our first check from our original investor Ryan Moore and his firm Accomplice Ventures. That allowed us to quit our jobs and focus full time on the product and we haven’t looked back ever since. It was probably the most pivotal moment for us, as crazy as it may seem with everything that has happened since.
On trends: DFS is changing the way fans look at, and take in sports and our users are proof of that. For example, we are seeing fantasy golf grow much faster than anticipated. We recently had our largest ever single day of user entry fees into our golf product/contests for the first Major of 2017. It was a 26% increase over the same golf major event last year. Also, the way sports are being consumed is a trend we’re seeing amongst fantasy players. For DraftKings to grow, we must focus on how we shift into the world of sports media consumption. Our expansion into this world is a natural growth point for us, agnostic of anything else happening in the industry. According to a recent survey among DraftKings customers, almost half of our players have started following another sport since playing
On merging with FanDuel: If the merger is approved, FanDuel and DraftKings are merging to bring together the best of each company to advance the fantasy sports industry by better serving players and fans. The combination will create operational efficiencies and cost savings that will enable increased investment in growth and product development, delivering enhanced user experiences and creating an overall stronger fantasy sports community. The merger comes at a pivotal moment in the rapidly evolving fantasy sports industry and our combined technology and product offerings will benefit consumers and generate strong user engagement.
On legal challenges: For anyone starting a business or who has an idea that has the potential to disrupt or redefine an industry, it’s very important to consider the implication your business may have for lawmakers and regulators. We continue to be optimistic about the regulatory landscape and we’ve embraced common sense legislation to ensure the long-term growth of our business and industry. We entered 2017 with momentum after legislation passed in eight states last year, including New York. We’re anticipating additional legislative victories this year but we’re realistic that passing legislation in many states will require a multi-session effort. For a new industry like ours, that’s to be expected, as many lawmakers aren’t familiar with fantasy sports or DFS- to date we have passed legislation in 11 states in a very short time.
On bolstering media content: One of the top reasons people play fantasy is to bring them closer to the games they love making their sports entertainment experience more exciting. We noticed there was an opening in the market for a much closer integration of what fantasy players consume in terms of content. Our overall strategy is centered on creating the best user experience for all sports fans. This includes content, games, more sports and ever evolving technology so that it all comes together seamlessly. A great example of this is our DK Live app. DK Live aggregates all of a player’s DraftKings contests, favorite players and proprietary insider information into a real-time news feed – it’s a personalized stream of the fantasy sports updates that players need on game day. DK Live is currently available for DraftKings’ NFL, NBA, NHL, Golf and most recently (as of Tuesday, April 18th), MLB.
On expansion: This year we are extremely excited about our plans for international expansion. We launched internationally in February 2016 in the UK and have seen an unexpected growth and engagement with our product. In January, we announced that DraftKings had been granted a Controlled Skill Games License by the Malta Gaming Authority. We are now live in Malta and Germany! This license will allow us to expand to additional EU countries, further underpinning our expansion into Europe.