Yahoo Enters Daily Fantasy Sports Market: Impacts And Analysis

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Season-long fantasy giant Yahoo Sports has officially entered the daily fantasy sports fray.

That’s per an update to the iOS app for Yahoo Fantasy Sports:

Win cash every day with our new game, Daily Fantasy! It’s just like our full season leagues you know and love except contests last just one day, you can pick any players you want within a salary cap, and you can win cash prizes. Champions crowned daily!

Yahoo originally signaled its intention to launch a DFS site in April. The web-based lobby can be found here. Its first freeroll — with a maximum of 1,000 players — filled within half an hour.

True test of fantasy crossover appeal

Yahoo’s entrance triggers a critical test for the nascent daily fantasy sports industry.

Much of the hope for DFS growth is predicated on the sizeable consumer interest in season-long fantasy sports – a market that counts somewhere north of 40 million annual participants in the United States.

Up until the point, the DFS industry has been dominated by “home-grown” operators like DraftKings and FanDuel that are built completely on the daily variant

But Yahoo commands a sizeable chunk of the season-long fantasy market.

While it’s not yet apparent how aggressively Yahoo will market to that base, it’s hard to believe Yahoo would launch a passive product in the current DFS climate. The co-mingling of DFS with their primary fantasy sports app implies a plan for tight integration and heavy cross-marketing.

That means we’ll get our first direct sense of how amenable the yet-to-be-converted season-long crowd is to the daily fantasy product.

As Yahoo’s DFS introduction notes: “You didn’t seriously expect Yahoo Sports to ignore the daily fantasy boom, did you?”

Where will company draw the DFS line?

Yahoo’s entrance will also impact a fundamental division among current daily fantasy sports operators: where to draw the line in terms of what sports to offer under the DFS model.

Current market leaders DraftKings and FanDuel take polarized positions on this issue, with FanDuel limiting its slate to major professional team sports.

DraftKings, on the other hand, has expanded its offerings to include sports such as golf and NASCAR.

Where Yahoo lands on the question will resonate throughout the industry and could provide some clarity through consensus regarding exactly what sports fall within the UIGEA exemption for real-money fantasy sports play.

In an initial post about its planned offerings, it appears that Yahoo is sticking with NFL, MLB, NBA and NHL:

Yahoo may not have invented traditional season-long fantasy gaming, but we got it right. The plan for daily fantasy is exactly the same. Our hope is to become your preferred home for DFS across the four major sports.

Other major players set to join before NFL season

Yahoo’s announcement is the first of what is expected to be a series of entrances by major players into the DFS market prior to the start of the upcoming NFL season.

There’s Amaya, who reiterated their plans to have a site up and running before the end of their year in a recent earnings call. The company’s still-powerful U.S. brand and massive international liquidity could shake up the market in unpredictable ways.

And LSR understands that another major U.S, brand is close to launching a standalone DFS product.

How competitive will Yahoo be in crowded DFS space?

A good part of the answer to this question relies on the answer to the earlier question regarding how eager season-long players will be to cross over into fantasy.

But even absent that impact, it’s hard to argue against Yahoo having an immediate and substantial impact on the industry:

“If there was a company that could instantly challenge FanDuel or DraftKings, it would be Yahoo,” said David Geller, the former global head of fantasy sports at Yahoo, soon after Yahoo’s announcement that it planned to offer DFS.

“I am kind of excited, just because I am obviously a huge fan of Yahoo fantasy sports, so I would love to see them do well in the space,” Geller, who now oversees the DFS site DailyMVP, continued. “And bringing a primetime player into the daily space is going to be good for the industry in general.”

Inside the product

Some quick notes about the Yahoo DFS app:

As for the game itself, it definitely has some differences from the offerings at traditional salary-cap sites. For instance, for baseball contests:

Rules for NFL are also up, even though we’re a few months away from games. The cap will again be $200, and scoring follows industry standards.

Right now, Yahoo’s offerings, lobby and interface don’t look and feel that much different than what one would see at DraftKings and FanDuel. In fact, the interface looks amazingly similar to FanDuel’s. Granted, there are only so many ways to present a DFS lobby, but most of the major sites have managed to create their own look.

“If imitation is the sincerest form of flattery, then Yahoo must have a crush on FanDuel,” a FanDuel spokesperson told after the Yahoo launch.

Anyone expecting innovation from Yahoo on rollout was likely a bit disappointed; sticking with the standard model, to get up and running for NFL season, is certainly the safest play.

Screenshots of the app

yahoo-ss-1 yahoo-ss-3 yahoo-ss-4

Instant reaction

Obviously, this was big news in the fantasy world, and everyone had takes as the Yahoo rollout commenced: