FanDuel

FanDuel Group
Founded 2009
Type Subsidiary
Headquarters New York City, United States[1]
Membership
6 million
Owner Paddy Power Betfair (61%)
Key people
 Matt King
Carl Vogel
David Nathanson
Staff
400
Website fanduel.com

FanDuel is a daily fantasy sports provider from the United States and bookmaker based in New York City. Originally founded in 2009, the service is the second largest DFS service in the country (behind DraftKings) based on entry fees and user base.[2][3]

In November 2016, FanDuel and DraftKings reached an agreement to merge. However, after the Federal Trade Commission threatened litigation over the deal because it would create a monopoly, the merger agreement was terminated in 2017. In May 2018, FanDuel agreed to be acquired by Irish bookmaker Paddy Power Betfair, with FanDuel becoming its main brand in the United States for the recently legalized market of sports betting.

History

FanDuel was founded by Nigel Eccles, Lesley Eccles, Tom Griffiths, Rob Jones and Chris Stafford on July 21, 2009, as a pivot from Hubdub, a news prediction site, after taking in $1.2 million in venture capital funding from Pentech Ventures and Scottish Enterprise.[4][5] In 2010, FanDuel held its first "FanDuel Fantasy Football Championship (FFFC)." The event consisted of 10 users who won entry into the event by winning a qualifying league throughout the NFL season. First place was awarded $25,000 and the total prize pool was $40,000.[6]

On January 30, 2013, FanDuel announced that it had closed an $11 million Series C funding round. The round included new investor Comcast Ventures (the venture capital affiliate of Comcast Corporation), along with previous investors Piton Capital, Pentech Ventures, Bullpen Capital and serial investor Richard Koch. In September 2014, the company announced $70 million in Series D funding. The round was led by Shamrock Capital Advisors with participation from NBC Sports Ventures and KKR.

Previous investors Bullpen Capital, Pentech Ventures and Comcast Ventures also participated.[7]

In July 2015, FanDuel announced a Series E funding round of $275 million[8] leading the company to be valued at over a billion dollars. Shortly after announcing the fundraise, FanDuel acquired sports analytics company numberFire. In September 2015, FanDuel acquired the e-sports focused DFS service AlphaDraft.[9] In October 2015. The New York Times reported that an employee of DraftKings inadvertently released data before the start of the third week of NFL games and won $350,000 on the FanDuel website.[10]

It was later revealed that DraftKings employees had made $6 million playing on FanDuel. DraftKings stated that the employees could not have used their information to make decisions about FanDuel lineups, but data showed that DraftKings employees had won 0.3% of the $2 billion of prize money that FanDuel has given out. Also, 91% of the player profits at DraftKings and FanDuel were won by just 1.3% of players on the website.[10]

FanDuel and DraftKings have since prohibited their employees from playing in contests for money on rival websites.[11]

In May 2015, FanDuel hired 38 of 42 employees that were laid off by Zynga 365 sports. After raising $275 million in July 2015 FanDuel made its second acquisition in app developer Kotikan. Kotikan developed FanDuel's mobile app, and it was decided that they would be brought in house to help further develop mobile offerings.[12] The preceding month (August 2015) FanDuel acquired sports analytics company numberFire.

While NumberFire will continue to operate independently, they were brought on board to help provide more data to players. CEO Nigel Eccles jumped at the opportunity to, “educate sports fans”. Shortly after the acquisition of numberfire, Fanduel went on to acquire the fantasy eSports company AlphaDraft (September 2015).[13] Fanduel moved very rapidly from not acquiring any companies in its first five to six years, to acquiring three in a matter of a couple months.[14]

On November 18, 2016, DraftKings and FanDuel announced an intent to merge. The combined company would serve over 5 million users.[15] On June 19, 2017, the Federal Trade Commission (FTC) announced that it would seek a preliminary injunction to block the then-proposed merger. The FTC felt that the proposed transaction would give the combined company 90% of the U.S. DFS market, which it considered to be a monopoly position.[16] The merger was subsequently terminated.[17][18]

In September 2017, FanDuel and DraftKings each paid $1.3 million to settle with the Massachusetts Attorney General's office over allegations of unfair and deceptive practices by the companies prior to 2016.[19] In November 2017, Nigel Eccles left the company. He was replaced as CEO by Matt King, who was previously CFO.[20] Co founder Tom Griffiths left the company shortly thereafter, replaced by Nik Bonaddio, formerly of NumberFire, as Head of Product.[21]

Acquisition by Paddy Power Betfair, expansion to sports betting

In May 2018, British bookmaker Paddy Power Betfair announced its intent to acquire FanDuel. Paddy Power Betfair planned to contribute $158 million and merge its existing assets in the United States (which also include the horse racing-oriented cable networks TVG Network and TVG2) into FanDuel; Paddy Power Betfair will hold a 61% controlling stake, with the option to increase its stake to 80% and 100% over time.

The sale came in the wake of the Professional and Amateur Sports Protection Act of 1992—which effectively outlawed sports betting in almost all states in the United States—being declared unconstitutional by the Supreme Court. FanDuel had been preparing to offer a sports wagering platform, while Paddy Power Betfair stated that the acquisition would make it "exceptionally well placed to target the prospective sport betting opportunity."[22]

The sale was completed July 11, 2018, with Paddy Power Betfair's U.S. operations becoming known as FanDuel Group.[23] FanDuel will serve as Paddy Power Betfair's primary U.S. operating brand.[24] A few days later, Paddy Power Betfair opened its first FanDuel branded sportsbook at the Meadowlands Racetrack in New Jersey.[25][26]

Partnerships

On November 12, 2014, FanDuel announced a strategic partnership agreement with the National Basketball Association (NBA).

As of 2016 FanDuel has partnered with 15 NFL teams[27] and 16 NBA teams.[28] These teams include:

Major partnerships with daily fantasy sports websites

NFL:

  • Baltimore Ravens
  • Buffalo Bills
  • Chicago Bears
  • Cincinnati Bengals
  • Cleveland Browns
  • Detroit Lions
  • Green Bay Packers
  • Houston Texans
  • Indianapolis Colts
  • Jacksonville Jaguars
  • New York Jets
  • Philadelphia Eagles
  • San Diego Chargers
  • Tampa Bay Buccaneers
  • Washington Redskins

NBA:

  • Atlanta Hawks
  • Brooklyn Nets
  • Charlotte Hornets
  • Chicago Bulls
  • Cleveland Cavaliers
  • Dallas Mavericks
  • Detroit Pistons
  • Indiana Pacers
  • Los Angeles Lakers
  • Memphis Grizzlies
  • Miami Heat
  • Milwaukee Bucks
  • Orlando Magic
  • Portland Trail Blazers
  • San Antonio Spurs
  • Utah Jazz

On May 17, 2018, FanDuel announced an expansion of what was previously a limited partnership with the WNBA. The multi year expansion makes FanDuel the official one day fantasy partner of the WNBA, and includes rights to stream games.[29]

Awards and recognition

2016

2015

  • Webby Awards: Judges Selection: Best Sports App (Handheld Device)[32]
  • Webby Awards: People's Choice Award: Best Mobile Sports App[33]
  • Inc Magazine: Best Industries[34]
  • Entrepreneur Magazine: 100 Brilliant Companies[34]
  • FSTA's Best Daily Fantasy Sports Contest, Best Daily Fantasy Mobile App and Best Fantasy Live Event.[35]

2014

  • FanDuel founders Nigel Eccles and Tom Griffiths named to Silicon Alley's 100[36]
  • FSTA's Best Daily Fantasy Product for both Web and Mobile[37]

2013

  • FSTA's Best Fantasy Contest[37]
  • Nominated for the Europas Best Gaming or Social Games Start Up 2013[38]
  • Mashable Sports Innovation Index Winner 2012[39]

2012

  • Mashable's Sports Innovation Index & FSTA Most Outstanding Fantasy Contest[40]
  • Scotland IS Outstanding Performance in Business Growth 2012[41]
  • Scotland IS Company of the Year 2012[41]

2010

  • Techcrunch Best Sports and Entertainment Award[42]
  • Heraldscotland.com Global Ambition Award[43]
  • TechCrunch's Best Sports and Entertainment Startup[44]

References

  1. ↑ Paul Sawers (July 20, 2015). "Fresh from $275M funding round, fantasy sports firm FanDuel acquires app development firm Kotikan". VentureBeat.
  2. ↑ Reagan, Brad. "A Fantasy Sports Wizard's Winning Formula". Wall Street Journal.
  3. ↑ DiFino, Nando. "Instant Gratification in Daily Fantasy Sports Over Traditional Leagues". Wall Street Journal. Retrieved 18 March 2012.
  4. ↑ King, Bill. "FanDuel delivers daily dose of fantasy. games". SportsBusiness Journal. Retrieved 18 March 2012.
  5. ↑ Butcher, Mike. "FanDuel turns fantasy sports betting into a social game". TechCrunch. Retrieved 18 March 2012.
  6. ↑ "2010 FFFC Final Standings & Winning Lineup". rotogrinders.com.
  7. ↑ Chernova, Yuliya. "2 September 2014". The Wall Street Journal. Retrieved 15 October 2014.
  8. ↑ Lora Kolodny (14 July 2015). "Fantasy Sports Create Billion-Dollar Startups". WSJ.
  9. ↑ "FanDuel acquires AlphaDraft to get into esports".
  10. 1 2 Gaines, Cork. "DraftKings employees reportedly won nearly $6 million playing daily fantasy sports at rival FanDuel". Business Insider.
  11. ↑ Needleman, Sarah. "FanDuel, DraftKings Ban Employees From Playing Daily Fantasy Contests for Money". Wall Street Journal.
  12. ↑ Butcher, Mike. "After Raising $275M, FanDuel Acquires App Developer Kotikan". Kotikan.
  13. ↑ "FanDuel Review - DFS STRATEGY". www.dfsstrategy.com. Retrieved 2017-02-10.
  14. ↑ Ha, Anthony. "FanDuel Acquires Sports Analytics Company NumberFire". techcrunch.
  15. ↑ "DraftKings and FanDuel Agree to Merge". The Wall Street Journal. Retrieved 18 November 2016.
  16. ↑ "The FTC is attempting to block the DraftKings-Fanduel merger". TechCrunch. Oath. Retrieved 19 June 2017.
  17. ↑ Schiffer, Alex. Federal judge orders temporary stop to DraftKings, FanDuel merger. The Washington Post. 21 June 2017. Retrieved 3 August 2017.
  18. ↑ Spangler, Todd (2017-07-13). "DraftKings, FanDuel Scrap Merger Plans After FTC Opposition". Variety. Retrieved 2017-07-13.
  19. ↑ "DraftKings, FanDuel settle with Massachusetts for $1.3M apiece". ESPN. 7 September 2017.
  20. ↑
  21. ↑
  22. ↑ Roettgers, Janko (2018-05-23). "FanDuel Acquired by Paddy Power Betfair". Variety. Retrieved 2018-07-09.
  23. ↑ "Paddy Power Betfair, FanDuel Complete Merger; TVG Now Part Of FanDuel Group". Paulick Report. Retrieved 2018-07-31.
  24. ↑ "FanDuel Plans Sports-Gambling TV Shows as Betting Parlors Open". Bloomberg.com. Retrieved 2018-07-31.
  25. ↑ "FanDuel to open sportsbook at Meadowlands". ESPN.com. Retrieved 2018-07-31.
  26. ↑ Nick Corasaniti (11 June 2018). "New Jersey Legalizes Sports Betting". The New York Times.
  27. ↑ Brent Schrotenboer, USA TODAY Sports (21 April 2015). "FanDuel signs deals with 15 NFL teams, escalating daily fantasy integration". USA TODAY.
  28. ↑ Hunter Atkins. "FanDuel Announces Exclusive Partnerships with 13 NBA Franchises". Forbes.
  29. ↑ "FanDuel And WNBA Expand Fantasy Sports Partnership, Add Streaming". Legal Sports Report. 2018-05-18. Retrieved 2018-05-22.
  30. ↑ "Sports".
  31. ↑ "2016 Winners by rank" (PDF). Deloitte. Retrieved 16 November 2017.
  32. ↑ "Sports (Handheld Devices)".
  33. ↑ "FanDuel". webbyawards.com.
  34. 1 2 "Dominating Fantasy Sports, One Day at a Time". Inc.com.
  35. ↑ "FSTA Announces 2015 Industry Award Winners - FSTA".
  36. ↑ "Silicon Alley 100 2014 - Business Insider". Business Insider. 8 October 2014.
  37. 1 2 "FSTA Award Winners - Fantasy Sports Trade Association". fsta.org.
  38. ↑ http://www.theeuropas.com/p/peoples-choice/507
  39. ↑ "FanDuel Wins the Mashable 2012 Sports Innovation Index Award!". FanDuel Insider.
  40. ↑ Lauren Drell (11 December 2012). "Mashable". Mashable.
  41. 1 2 "Fantasy Sports Startup FanDuel Raises $70 Million". intrepeidexecutivegroup.com.
  42. ↑ "PE HUB » FanDuel Closes Series C". PE HUB.
  43. ↑ http://www.heraldscotland.com/business/corporate-sme/digital-business-awards-to-show-how-technology-can-aid-success-1.1048379
  44. ↑ Mike Butcher. "The Europas European Startup Awards 2010 – The Winners and Finalists". TechCrunch. AOL.
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