Fantasy Feud’s new home as a part of the newly formed Gaming Nation has the potential to vault the daily fantasy sports site clearly into the No. 3 position behind DraftKings and FanDuel.
All the transactions
In a busy month for the tier of daily fantasy sports sites behind DK and FD, Fantasy Feud becoming a part of Gaming Nation might trump all the other news.
FantasyAces and DraftDay both announced big moves recently as well. FA is at the start of a reverse takeover of the publicly traded DraftTeam and will become a public corporation. MGT Capital announced the sale of DraftDay for $7 million; DD will be operated by a subsidiary of the iGaming company Sportech.
Finally, Fantasy Feud was officially acquired along with three other companies to become one new company, called Gaming Nation. The overarching company started trading on the Toronto Stock Exchange Venture earlier this week.
Why is it a big deal? $50 million-plus reasons
At first glance, the deal might not seem like much of a gamechanger. But, in reality, it could have a wide-ranging impact on the DFS industry, including establishing FF solidly as a major player.
Fantasy Feud, a Toronto-based company launched in 2012, had already started to enter the conversation as one of the biggest DFS sites around — at least in the non-billion-dollar-valuation category. The site had upped its guarantees for baseball season — handing out $2 million in prizes since MLB began — and has already delved into offering NASCAR and golf contests.
Now, Fantasy Feud finds itself part of a larger corporation; with that will come a significant infusion of cash. CEO Justin Shulman broke it down in a blog post this week before doing an interview with Legal Sports Report:
This acquisition provides Feud with an extremely solid financial backing — over 50m raised to date by Gaming Nation — which will empower us with resources, infrastructure and lead to larger prize pools that many of you have already witnessed since baseball began. … We anticipate that the increased resources at our disposal, the growth of our contest sizes, and new users generated by all of our new business affiliates will put us in a strong position to put our stamp on the #3 platform in the DFS industry.
Shulman terms the new corporation as a group of synergistic companies. The other three entities under the Gaming Nation banner:
- 5050 Central, which runs electronic raffle systems.
- Guru Fantasy Reports, Inc., which owns FantasyGuru.com, a fantasy information site.
- Stevo Design, Inc., which owns Pick Nation, a handicapping site.
“A lot of the customers of the businesses fit the demographic for Fantasy Feud,” said Shulman, talking about the three other businesses that are part of GN. “We’re going to be using some joint marketing plans to funnel users over to FantasyFeud. The biggest thing for Fantasy Feud partnering with Gaming Nation, we’re going to have access to a network players that we don’t have to pay huge acquisition costs to move them into Fantasy Feud.”
For instance, Shulman notes that 5050 Central — whose product is called Pointstreak 5050 — has a database of people numbering in the millions. He acknowledges that obviously that database doesn’t mean all those people — or even a large percentage of them — will become FF users. But some of them are, and the cost to acquire those customers is quite low, compared to other customer acquisition methods.
What’s next for FF?
Clearly, we’re going to see changes from Fantasy Feud. Bigger guarantees will be offered up for players. The player base will expand, likely bringing more opportunities for cash games. The site will likely look different, eventually, with more help on the development side of things.
Also, Gaming Nation isn’t stopping with the four sites in the initial transaction.
“The plan is not to go spend millions on marketing and things like branding in stadiums,” Shulman said. “That’s not the strategy. The strategy is to keep growing the Gaming Nation network and use those touchpoints to bring our customer acquisitions in at a more effective number.
“There’s a significant amount of capital that’s put into Gaming Nation and the people behind it that have raised it. Gaming Nation is going to be going on an acquisition hunt,” Shulman continued. “And we’re aggressively looking to grow.”
Despite all the change, though, Shulman says Fantasy Feud won’t leave behind its roots as a hard-working daily fantasy company that succeeded where others failed.
“The most refreshing thing is, these guys aren’t coming in here and trying to tell us how to run our business,” Shulman said. “They have a high-level goal, but they are letting us be the daily fantasy experts, to do what we have done, but to do it on a bigger scale.”