Seven West Media, owner of the largest multi-platform broadcasting business in Australia, has announced that it is making a “strategic” investment in daily fantasy sports operator Draftstars.
Draftstars launched in April this year, the first foray into the Australian market by a US company. DraftDay launched DraftStars in partnership with CrownBet and Fox Sports. Seven West Media will own 33 percent of the joint venture.
Tim Worner, managing director and CEO of Seven West Media, said:
“We are delighted to partner with CrownBet and FoxSports in Draftstars. Our investment builds on our strategy of leveraging the power of our media assets to scale early stage businesses. Draftstars is an exciting investment for our company and we look forward to working with them and our investment partners in driving brand awareness and engagement.”
DFS is categorized as gambling in Australia
Draftstars is licensed and regulated by the Northern Territory, one of Australia’s states with a more liberal political attitude towards gambling — DFS is categorized as gambling under Australian law.
The Seven West investment rationale goes well beyond the gambling aspect of the Draftstars business.
Seven West Media’s chief digital officer, Clive Dickens, explained:
“Seven West Media is constantly looking at ways in which we can engage our large sports audiences on mobile. Draftstars will soon launch EPL and Cricket to complement its existing range of highly-engaging contests across AFL, NRL, NFL and NBA. It is a highly scalable, mobile product and platform that is backed by powerful partners, each of which provide strong competitive advantages.”
Australia is a newcomer to DFS
Until this year, there was very little awareness or interest in DFS in Australia.
Federally, there is little appetite for online gambling, although online lotteries and sports betting are offered. One of the largest Australian sports betting operators is Bet365, although the regulations don’t allow it to offer in-game betting.
DFS offers a recreational game that complements rather than competes with sports betting. In Italy, where DFS is only now being introduced, it is the big sports betting operators who are offering the product.
What Seven West Media gets out of it
The deal with Seven Media is exploiting the opportunity to increase audience enjoyment of sports. Theoretically, all parties should benefit:
- The broadcaster will increase audience participation and engagement.
- The sports betting operators should see more revenues because engaged sports fans are more likely to bet.
- Draftstars will get the opportunity to build a sizable customer base as its name is associated with the Seven West broadcast brand.
With DraftKings and FanDuel dealing with legislative difficulties in the US, expansion into the Australian market might not be on their radar right now.
However, if the multi-channel business model of Draftstars starts to see some success, other major operators will not be slow to join in. According to the BBC, Australians are the most prolific gamblers in the world, with around 80 percent of adults engaging in some form of gambling.