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FanDuel

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FanDuel Group
FoundedJuly 2009
TypeSubsidiary
HeadquartersNew York City, United States[1]
Membership
6 million
OwnerFlutter Entertainment
Key people
Matt King
Carl Vogel
David Nathanson
Staff
1,001
Websitefanduel.com

FanDuel Group is a New York City based bookmaker and daily fantasy sports provider. 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 (now Flutter Entertainment). Paddy Power Betfair merged its existing operations in the United States into FanDuel under the name FanDuel Group: the company sought to leverage FanDuel's existing userbase and brand recognition to help it enter the newly legalised sports betting market in the United States.

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 ten 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. In September 2014, the company announced $70 million in Series D funding.

In July 2015, FanDuel announced a Series E funding round of $275 million[7] 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.[8] 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.[9]

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.[9]

FanDuel and DraftKings have since prohibited their employees from playing in contests for money on rival websites.[10]

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.[11] 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).[12] 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.[13]

On November 18, 2016, DraftKings and FanDuel announced an intent to merge. The combined company would serve over five million users.[14] 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 market of DFS in the United States, which it considered to be a monopoly position.[15] The merger was subsequently terminated.[16][17]

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.[18] In November 2017, Nigel Eccles left the company. He was replaced as CEO by Matt King, who was previously CFO.[19] Co founder Tom Griffiths left the company shortly thereafter, replaced by Nik Bonaddio, formerly of NumberFire, as Head of Product.[20]

Acquisition by Paddy Power Betfair, expansion to sports betting

In May 2018, Irish/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."[21]

The sale was completed July 11, 2018, with Paddy Power Betfair's operations in the United States becoming known as FanDuel Group.[22] Betfair paid $465 million in cash, which was significantly lower than FanDuel’s internal valuation and resulted in a $120 million lawsuit in Scottish court by Lesley Eccles, former head of marketing for FanDuel, and other founders.[23][24] FanDuel will serve as Paddy Power Betfair's primary operating brand in the United States.[25]

A few days later, Paddy Power Betfair opened its first FanDuel branded sportsbook at the Meadowlands Racetrack in New Jersey.[26][27] In March 2019, a FanDuel sportsbook opened at Valley Forge Casino Resort in Pennsylvania.[28] FanDuel also offers online sports betting in Indiana, New Jersey, Pennsylvania, and West Virginia.[29][30]

In August 2018, FanDuel announced that it had partnered with Minute Media to create The Duel, a new site for fantasy/sports betting information generated by fans.[31] In November 2018, FanDuel became the first official daily fantasy and sports betting partner of the National Hockey League.[32] In September 2019, there was a book published by Houghton Mifflin Harcourt, about the original story behind FanDuel. Entitled "Billion Dollar Fantasy", it was written by Albert Chen, author of Sports Illustrated.[33]

Corporate affairs

Leadership

FanDuel is managed by CEO Matt King. Other key executives are:[34]

  • Paul Rushton, CFO
  • Kip Levin, COO
  • Mike Raffensperger, CMO
  • Tim Morrow, CTO
  • Christian Genetski, CLO

Awards and recognition

2016

  • Webby Awards: Judges Selection: Best Sports App (Handheld Device)[35]

2015

  • Webby Awards: Judges Selection: Best Sports App (Handheld Device)[36]
  • Webby Awards: People's Choice Award: Best Mobile Sports App[37]
  • Inc Magazine: Best Industries[38]
  • Fantasy Sports Trade Association (FSTA) Best Daily Fantasy Sports Contest, Best Daily Fantasy Mobile App and Best Fantasy Live Event.[39]

2014

  • FSTA's Best Daily Fantasy Product for both Web and Mobile[40]

2013

  • FSTA's Best Fantasy Contest[40]
  • Nominated for the Europas Best Gaming or Social Games Start Up 2013[41]
  • Mashable Sports Innovation Index Winner 2012[42]

2012

  • Mashable's Sports Innovation Index & FSTA Most Outstanding Fantasy Contest[43]

2010

  • Techcrunch Best Sports and Entertainment Award[44]
  • Heraldscotland.com Global Ambition Award[45]
  • TechCrunch's Best Sports and Entertainment Startup[46]

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. ^ Lora Kolodny (14 July 2015). "Fantasy Sports Create Billion-Dollar Startups". WSJ.
  8. ^ "FanDuel acquires AlphaDraft to get into esports".
  9. ^ a b Gaines, Cork. "DraftKings employees reportedly won nearly $6 million playing daily fantasy sports at rival FanDuel". Business Insider.
  10. ^ Needleman, Sarah. "FanDuel, DraftKings Ban Employees From Playing Daily Fantasy Contests for Money". Wall Street Journal.
  11. ^ Butcher, Mike. "After Raising $275M, FanDuel Acquires App Developer Kotikan". Kotikan.
  12. ^ "FanDuel Review - DFS STRATEGY". www.dfsstrategy.com. Retrieved 2017-02-10.
  13. ^ Ha, Anthony. "FanDuel Acquires Sports Analytics Company NumberFire". techcrunch.
  14. ^ "DraftKings and FanDuel Agree to Merge". The Wall Street Journal. Retrieved 18 November 2016.
  15. ^ "The FTC is attempting to block the DraftKings-Fanduel merger". TechCrunch. Oath. Retrieved 19 June 2017.
  16. ^ Schiffer, Alex. Federal judge orders temporary stop to DraftKings, FanDuel merger. The Washington Post. 21 June 2017. Retrieved 3 August 2017.
  17. ^ Spangler, Todd (2017-07-13). "DraftKings, FanDuel Scrap Merger Plans After FTC Opposition". Variety. Retrieved 2017-07-13.
  18. ^ "DraftKings, FanDuel settle with Massachusetts for $1.3M apiece". ESPN. 7 September 2017.
  19. ^ [1]
  20. ^ [2]
  21. ^ Roettgers, Janko (2018-05-23). "FanDuel Acquired by Paddy Power Betfair". Variety. Retrieved 2018-07-09.
  22. ^ "Paddy Power Betfair, FanDuel Complete Merger; TVG Now Part Of FanDuel Group". Paulick Report. Retrieved 2018-07-31.
  23. ^ "FanDuel Founders Suing For $120 Million After They Got Nothing In Sale To Paddy Power Betfair". Legal Sports Report. 2018-08-15. Retrieved 2019-10-25.
  24. ^ "FanDuel founder bets on love with new app". Crain's New York Business. 2019-09-20. Retrieved 2019-10-25.
  25. ^ "FanDuel Plans Sports-Gambling TV Shows as Betting Parlors Open". Bloomberg.com. Retrieved 2018-07-31.
  26. ^ "FanDuel to open sportsbook at Meadowlands". ESPN.com. Retrieved 2018-07-31.
  27. ^ Nick Corasaniti (11 June 2018). "New Jersey Legalizes Sports Betting". The New York Times.
  28. ^ Gelman, Bill (March 14, 2019). "FanDuel Sportsbook Opening Festivities Just A Precursor To March Madness". Play Pennsylvania. Retrieved March 14, 2019.
  29. ^ Maykuth, Andrew (July 29, 2019). "Fantasy sports giant enters Pennsylvania betting market". The Philadelphia Inquirer. Retrieved October 28, 2019.
  30. ^ Waters, Matthew (November 7, 2019). "FanDuel Sportsbook Reports Strong Growth; Fox Bet Performs As Expected". Legal Sports Report. Retrieved November 7, 2019.
  31. ^ "FanDuel, Minute Media Partner to Create Fan-Driven Fantasy, Betting Site". www.sporttechie.com. Retrieved 2019-10-25.
  32. ^ "FanDuel Becomes Official Sports Betting Partner For NHL". Legal Sports Report. 2018-11-05. Retrieved 2018-11-06.
  33. ^ Barnes, Fred. "'Billion Dollar Fantasy' Review: Making a Bet On Sports Fans". WSJ. Retrieved 2019-10-23.
  34. ^ "About". www.fanduel.com. Retrieved 2019-09-29.
  35. ^ "Sports".
  36. ^ "Sports (Handheld Devices)".
  37. ^ "FanDuel". webbyawards.com.
  38. ^ "Dominating Fantasy Sports, One Day at a Time". Inc.com.
  39. ^ "FSTA Announces 2015 Industry Award Winners - FSTA".
  40. ^ a b "FSTA Award Winners - Fantasy Sports Trade Association". fsta.org.
  41. ^ "Archived copy". Archived from the original on 2013-01-20. Retrieved 2013-02-12.{{cite web}}: CS1 maint: archived copy as title (link)
  42. ^ "FanDuel Wins the Mashable 2012 Sports Innovation Index Award!". FanDuel Insider.
  43. ^ Lauren Drell (11 December 2012). "Mashable". Mashable.
  44. ^ "PE HUB » FanDuel Closes Series C". PE HUB.
  45. ^ http://www.heraldscotland.com/business/corporate-sme/digital-business-awards-to-show-how-technology-can-aid-success-1.1048379
  46. ^ Mike Butcher. "The Europas European Startup Awards 2010 – The Winners and Finalists". TechCrunch. AOL.
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