If you watch football on the weekends, it’s becoming impossible not to see a FanDuel or DraftKings ad during the games. Together, FanDuel and DraftKings have spent over $100 million on television ads aired so far this season. This has put them in the top space for most appearances over any other company. For FanDuel and DraftKings, the beginning of the season is their biggest chance to pick up new customers.
According to DraftKings CEO Jason Robins, the company has grown from 3 to 4.5 million users in the weeks leading up to the NFL season. A FanDuel spokesman also said that the first weekend of games was their biggest weekend of the year. Because of this, it makes sense for both companies to push forward as many ads as possible during this time of the year. For a company directly related to the sports industry, the amount of users that they draw right now is crucial. However, running so many ads in such a short period is upsetting many viewers.
During the first few weeks of the season, the two companies combined for over 30,000 airings across various channels. DraftKings and FanDuel are currently in a great spot financially. Since they are not considered as gambling sites by the law due to the admission for Sports Leagues in the 2006 RAWA bill, both of these companies are relatively unregulated. This means that each company has free reign to plan their strategies for how many ads they run. For viewers during the middle of the season this can lead to quick ad-fatigue.
Matt King, chief financial officer of FanDuel, says that his company is aware of this problem, but that it is worth the risk. Other than a few negative tweets from fans, there seems to be much more upside than down. The company is continuing to grow its user base more than ever before. Both FanDuel and DraftKings are beginning to make deals with various leagues and sports broadcasters. These two titans are turning the daily fantasy sports industry into an arms race at this point it seems. It makes one wonder how long FanDuel and DraftKings will manage to go on before attracting more attention from the federal government.
Reports have even started appearing that the FBI may already be investigating the company. However, a spokeswoman for US Attorney Carmen Ortiz’s office said it could neither confirm nor deny the investigation. Nonetheless, if ever there was a time for these companies to use the money, power, and relations that they have gained, now would be it. If any ruling does happen stating that daily fantasy sports are gambling, it could serve a devastating blow to both DraftKings and FanDuel.
Although things may seem dire right now, these questions are only being raised at this time because FanDuel and DraftKings must stand in the spotlight at the start of the sports season to attract more customers. Before long they will once again retreat off the headlines, and it is likely that the government will not end up pursuing further action.
Do you think that FanDuel and DraftKings should be considered online gambling? Listen to DraftKings CEO Jason Robins explain why he does not believe that it is:
“If you randomly picked against the [point spread] you would be close to 50/50 almost every time. If you randomly picked a fantasy lineup and played against someone who put thought into it, they would beat you 9 times out of 10, if not more. So [daily fantasy is] pretty different, I think, from sports books where even though there is some advantage that can be had, the edges are so minimal that it is primarily chance-based.”
It will be interesting to see where the future takes both FanDuel and DraftKings. For now we can only wait and see how everything unfolds.