FanDuel turns fantasy sports betting into a social game

The people that brought you HubDub, the prediction site that effectively turns news content into a game, have had a new idea. FanDuel is a premium, paid-for game focused on fantasy sports. Running in private beta for the last month, the game opens up today. The site is totally focused on U.S. sports (baseball, NFL).

Although the competitive space for daily fantasy sports is fairly new, there’s clearly an opportunity there – some 20m people play fantasy games, making it a $2bn industry. Currently big players such as Yahoo, CBS and ESPN dominate the market.

But if you play Mafia Wars and other social games on Facebook, going back to playing traditional fantasy sports on CBS feels like going back to when dinosaurs walked the earth. There’s clearly a gap waiting for something better and more social.

The trouble is most fantasy sports require a lot of time commitment as you have to play for the whole season, meaning a long time to get anything out of it.

FanDuel addresses this problem by letting users play and win in a day instead of the whole season. Players can draft a new team at any point, face-off with another player, but for real money (there is a $25 limit to stakes). The player whose team has the most fantasy points at the end of the day’s games wins the cash prize, so no season long commitment. The game is integrated with Twitter and Facebook, allowing you to brag about your wins. Right now it only covers Baseball but the fantasy football game will launch when the football season starts.

The site books revenues from taking a 10% commission on each of the match-ups, although when you sign up they give you $10 or you can play for free.

But hold on just a second – how is this all legal in the U.S.?

It’s real simple. Because of the fantasy sports carve out of the 2006 Unlawful Internet Gaming Act, is completely legal to play in the U.S. How? It uses exactly same rules as any other season long fantasy sports game, the only difference is that the games last only a day (for baseball) or a week (for football).

Meanwhile Hubdub – actually based in Scotland although all its products are aimed at the US – won a series A round from from PenTech Ventures in January 2009 and now has a quarter of a million users and partnerships with Huffington Post and Reuters. It came up with the fan duel idea after the most recent SxSW where they met with HubDub users.