Serious Challenger Or Third Wheel? Draft Steps Up its Daily Fantasy Sports Game

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Daily fantasy sports in the US has been a two-horse race for quite some time. FanDuel and DraftKings have all but cornered the market.

But a few years into its operation, Draft is making the most serious push to become the third player in the marketplace.

Challenging the ‘big two’

In 2016, DraftKings and FanDuel had agreed to a merger. Federal regulators stood in the way, though, claiming that a combined DFS entity would monopolize more than 90 percent of the US market.

We can deduce that all other operators combine to account for about 10 percent of the total market share. The complex legal landscape and the marketing budgets of the “big two” present significant roadblocks. Others have struggled to compete in the space.

There is an argument that that is changing. Fantasy sports legislation continues to expand at the state level, creating legal clarity for companies that didn’t exist previously. In addition, DraftKings and FanDuel have both scaled back their marketing frenzy, granting a window of visibility to their competitors.

Draft entered the marketplace with its first round of public funding in late 2014, and it followed that up with another run in early 2015. The combined $5.6 million wasn’t much in comparison to the two frontrunners, but it was a starting point.

Paddy Power Betfair brings its resources

It’s dangerous to go it alone in the DFS marketplace these days. Competing with the big boys requires a big budget, and major investors are harder to come by than they have been in times past.

Earlier this year, Paddy Power Betfair acquired Draft in a landmark deal. The exact terms weren’t disclosed, but the acquisition included an up-front payment of $19 million, along with future payments contingent on performance.

It was a bit of a gamble from the betting behemoth, and the number raised a few eyebrows across the industry.

PPB could easily afford it, though. And selecting Draft to carry its brand into the US speaks well for the product and team that it’s established. The platform also serves as another foothold for PPB in a potentially legalized sports betting marketplace.

How Draft is different

Given the head start they have, it would be silly to try to compete on the same level as the big two.

Instead, innovators in the DFS space are exploring alternatives to the salary-cap format. And a few of them are discovering significant markets.

Boom Fantasy, for example, is an award-winning, prop-based platform that has gained traction.

Eaglestrike has a vision for brick-and-mortar DFS, and it’s begun installing pick’em kiosks in bars across the country. It expects to have significant competition in the future.

Draft has its own niche, too, and a particular appeal to season-long fantasy players. Rather than selecting a group of players within a salary cap, users draft their lineups against other users. The snake format is as old as fantasy sports itself, but Draft incorporates the more trendy elements of DFS, too.

Users can play head to head or in leagues of up to 12 teams. The site also offers season-long “Best Ball” contests with 18-man rosters. New lineups are created fresh each week, and contests run across a wide range of buy-ins.

Unlike most operators, Draft’s platform was built as a mobile game from the ground up.

An easier transition for season-long players

Although DFS is all the rage these days, there is still a great deal of loyalty to the season-long format.

DraftKings and FanDuel have developed hybrid fantasy offerings in an effort to attract those players. Their respective “Leagues” and “Friends Mode” provide elements of both the daily and season-long formats, but there’s still something lacking.

The snake system that Draft employs is a lot closer to what the majority of fantasy players are used to. Unlike other hybrid systems, Draft’s contests do not include any duplicate players. Participating in a live draft also ticks some of the social boxes that are becoming a focus for DFS operators.

According to Draft, it’s currently the fastest-growing DFS company in the space.

Stepping up its game

Just as importantly as appealing to the season-long customer, Draft is gaining some traction within the serious DFS community, too.

With a little loose change in its pockets courtesy of PPB, Draft seems to be investing in a mainstream marketing push, too.

In August, Draft secured a deal with boxer Floyd Mayweather ahead of his super-fight against Conor McGregor. The partnership centered around a promotion in which users could draft against Mayweather for a chance to win tickets to the fight. The financial terms of the deal are anyone’s guess, but Draft had to have made it worth his while.

A number of superstar athletes, including Shaquille O’Neal and Richard Sherman, have tweeted about Draft, indicating their marketing strategy relies heavily on social media. It even offered to reimburse Chad Johnson for an old $20,000 fine if he could get 400 followers to join.

The team behind Draft’s user experience seems to be particularly sharp, and it continues to present clever, eye-catching promotions. It offered “Participation Trophy” refunds for lineups that bubbled in Week 1, for example:

In perhaps its sharpest move, Draft recently paid six figures for the domain, too. Although it’s still stuck with the @PlayDraft twitter handle, the clean URL provides a lot of intrinsic value.

Can Draft compete?

Although it has a good start, the road ahead won’t get any easier for Draft. While plenty of other startups have come and gone from the DFS landscape, though, it seems to be charting a path through the storm.

The PPB acquisition brought world-class gaming resources to the party. And partnerships with top-tier athletes and industry veterans continue to expand the brand’s visibility.

What’s most noteworthy about Draft, though, is its unique approach to the format. Its platform has particular appeal to season-long players, who still represent a much larger community than DFS. Tapping into more of that market is key to continued success.

If Draft can keep command of that audience, the “big two” might have to make a little elbow room for another serious competitor.