Welcome To The Most Crucial Quarter In DFS History: DraftKings Diversifies, FanDuel Sticks With What It Knows

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Red and Blue Crystal pills

As we move into July, we enter the most important quarter in the history of daily fantasy sports.

Hyperbole? Not a chance.

FanDuel and DraftKings have had it all their own way for years. Amaya (PokerStars/Full Tilt) and Yahoo are planning to put an end to that, by rolling out their own DFS platforms in time for the start of the NFL season in September.  Amaya has stated that, if their product misses this deadline, it will see the light of day before the year’s end.

FanDuel and DraftKings have adopted polar opposite approaches in preparing for the disruptive impact of two new rivals – and it is making for a fascinating summer.

DraftKings gets busy

DraftKings simply won’t stay out of the limelight. Their branding is so dominant in Vegas this summer that its Customer Experience chief Jon Aguiar claims ‘the goal is that you can’t leave the World Series of Poker without having heard of DraftKings.’

Not content with targeting the poker demographic, DraftKings has also been in the headlines with its deal to become the presenting sponsor of the Belmont Stakes. Horse-racing may not seem like the most traditional fit with DFS, but the DraftKings marketing gurus must believe that there is value to be had from it. Diversification has been at the heart of their sponsorship approach, and it seems that geographical diversification is next on the to-do list.

As of last week, only soccer-specific MondoGoal had targeted the U.K. as a key region. However, that is changing, as DraftKings has just applied for a U.K. gambling license. This is a controversial move, given that in the U.S., DFS operators go to great lengths to avoid the word ‘gambling,’ to try to stay in compliance with the UIGEA. The U.K. is crazy for season-long fantasy soccer, but that has yet to translate to a love of the daily format. DraftKings is betting on its ability to change that trend, and to take DFS global.

Most attention-grabbing of all is the news that DraftKings has struck a long-term deal to become the first DFS sponsor of a venue – and the multiple teams that participate there. The arena in question? Madison Square Garden in New York City. Not a bad one to start with. The DraftKings motto seems to be ‘go big or go home’ this summer. It is beyond debate that DraftKings is looking to get ahead of the curve, in anticipation of the Amaya and Yahoo disruption.

FanDuel holds steady

FanDuel, meanwhile, has stuck with the tried and trusted. Apart from securing some valuable real-estate in the form of Manny Pacquiao’s shorts, their biggest headline so far this summer has been their $4mm live MLB final. It’s a big deal, and former baseball and American Football star Bo Jackson has signed on as an ambassador, but diverse it certainly is not. It is a bigger version of what FanDuel does best – more of the same, and it matches the DraftKings $4mm MLB offering in size.

A glance at the SuperLobby shows the current state of play with the ‘big two’, as the NFL, NBA, NHL, college basketball and college football are in their offseasons. DraftKings seems well-stocked with variety over the summer, with golf, soccer, NASCAR and MMA events fleshing out the parts of the calendar that Major League Baseball does not cover.

Meanwhile, FanDuel is going all-in on MLB.

Is FanDuel chasing shadows in its baseball approach?

Baseball is, of course, big business. It is still thought to be the third-most popular format of DFS, and its stats-heavy nature lends itself perfectly to number-crunching. It is a sport that appeals to the new breed of DFS pro: data driven, analytical decision makers who treat every entry fee as an investment. It may be that FanDuel is intent on establishing itself as THE place for pros to play.

The problem is that, with hundreds of millions of dollars of funding to recoup, there is limited value in appealing to the tiny fraction of DFS professionals. Daily fantasy sports is a growing market, and as it stands, the recreational players simply provide more value to the operators.

Secondly, as reported by LegalSportsReport.com earlier this month, marketing ubiquity means that it is DraftKings that is on the fast-track to establishing itself as the leading operator when it comes to MLB:

‘The expansion of an already-rich relationship with Major League Baseball in April, coupled with promotional relationships with a long list of teams, gives DraftKings a clear advantage when it comes to the baseball segment of DFS.’

Depth vs. breadth

Whichever way you slice it, FanDuel is unquestionably taking a gamble by relying on a solitary sport to engage its users over the summer months. FanDuel is banking on depth beating breadth, while DraftKings is taking the opposite approach.

For FanDuel, the decision to stick with what they know will look either inspired or disastrous by the year’s end, when the impact of Amaya and Yahoo’s arrival will be known. On first glance, however, it certainly appears that DraftKings is positioning itself more effectively.

The start of the NFL season is going to be a bloodbath between FanDuel, DraftKings, Amaya and Yahoo. It may well be that DraftKings is more intent on establishing itself as the industry leader in non-NFL circles than in going toe-to-toe with three superpowers.

The number one spot doesn’t split four ways. Something will have to give. DraftKings and FanDuel will surely bend; the question of whether they snap under the burden, or bounce back stronger remains to be answered.

Photo by W.carter used under license CC BY-SA 4.0.