Fantasy sports is a huge business, and the fastest growing segment is one-day fantasy gaming. As that part has grown, sports leagues are taking notice and looking to get in on the trend. With that in mind, the NBA has done a strategic partnership with FanDuel to promote the one-day gaming site and launch a series of free games throughout the 2014/15 season and beyond.
FanDuel operates a series of fantasy matchups, enabling users to join one-day fantasy matchups, draft a team of their favorite players, and try to garner the most points each day. Users pay to join particular matchups and are awarded prizes depending on how well their teams score.
FanDuel, meanwhile, takes a cut of all the money people pay into the contests. It’s a pretty lucrative business, especially as the segment has grown. The company is on pace to do about $600 million in entry fees this year, of which it will pay out $540 million in prizes and take $60 million for itself.
And that’s before its deal with the NBA. As part of a strategic agreement, the basketball league will be linking to and promoting FanDuel’s one-day fantasy games across its digital properties, including NBA.com, NBA TV, and its mobile apps. Meanwhile, FanDuel will run a series of free daily contests throughout basketball season, through which players can sign up to win non-cash prizes, including regular-season tickets, unique NBA experiences, NBA merchandise and memorabilia.
FanDuel raised $70 million in new funding recently, led by Shamrock Capital Advisors with participation from NBC Sports Ventures.
As part of the multi-year strategic partnership, the NBA has become a strategic investor in FanDuel and league executive Sal La Rocca has joined the company’s board as it looks to expand its business beyond the huge fantasy football market and tackle other sports. In addition, five NBA teams have partnered with FanDuel to promote its games at their own digital properties and even in their auditoriums. They include the Brooklyn Nets, Chicago Bulls, Dallas Mavericks, New York Knicks and Orlando Magic.
For the league and teams, the hope is to drive engagement and more interest in the game. According to FanDuel CEO Nigel Eccles, when someone becomes a FanDuel player, their consumption of games and news related to a sport increases 40 percent.
For FanDuel, having support of the league should help drive adoption among people who are already fans. While it won’t operate paid games through the NBA deal, FanDuel hopes it will be able to get NBA fans signed up and then promote paid games through other sports to them.