Fantasy sports is big business. Fanduel, which has a rumored valuation over $1 billion after raising $88 million from investors, paid out over $540 million in prizes in 2014. DraftKings, the second-most popular fantasy sports company, has raised $76 million in venture funding. Many leagues, and even individual teams, are embracing daily fantasy sports, and for good reason. Fantasy sports can turn a meaningless NFL game between two non-playoff teams into a nail-biter for fans who have players on those teams.
Likewise, ESports (electronic sports) is also big business. Video game research firm Newzoo forecasts the number of pro gaming fans around the world will catapult from 89 million last year to over 145 million by 2017. Millennials are mesmerized by Twitch livestreaming, watching their favorite pro gamers practice on a regular basis, in addition to tuning into global events put on by leagues like ESL (Electronic Sports League) and MLG (Major League Gaming).
Given the popularity of the two entities, it’s no surprise that a start-up has emerged that combines professional video gaming with fantasy sports. AlphaDraft was created by CEO and founder Todd Peterson, who decided to combine his two passions: video games and fantasy sports. Peterson, who has been an avid gamer since the Atari 2600, started playing League of Legends (LoL) a year ago and fell in love with not only the gameplay, but also what Riot Games was doing in creating a sustainable eSports ecosystem through its League of Legends Championship Series (LCS). LCS went from selling out Staples Center for the 2013 Championship to selling out 2002 FIFA World Cup venue Sangram Stadium in Seoul, Korea last year.
“We felt that the LoL community size and passion was large enough to support this type of game and attended the Fantasy Sports Trade Association meeting to explore what it would take to develop the company,” says Matt Reilly, director of marketing at AlphaDraft. Now the site, www.alphadraft.com, has officially launched.
Like traditional sports, League of Legends has professional players that generate stats and compete on teams in regular season and playoff matches. Those players then generate statistics like Kills, Deaths, Assists and Creep Score (CS), which are used to create the AlphaDraft fantasy game.
“In AlphaDraft, you have a budget of $50,000 and you must choose a team of six players, plus the team you think will play best that week,” Peterson says. “Every player has a price, so you want to select the team composition you think will score the most fantasy points given your budget. The more knowledge you have of League of Legends, the more likely you will be able to identify undervalued players and create the highest-scoring fantasy dream team.”
Like FanDuel, AlphaDraft allows gamers to play for free. Current prizes range between $500 and $1,000 per week, but Peterson believes those numbers will quickly rise. He forecasts that his company could pay out several million in prizes this first year alone.
The laws of fantasy sports gaming can be complicated. “On a federal level we comply with the UIGEA, but on a state level there are laws in some that have restrictions on skill-based gaming,” Reilly says. “We will not operate in these states and we’ll use geo-location technology to enforce it.”
With over 85 million players, League of Legends is the most popular eSports game out there, and one of the most popular games, period. Peterson said that in the future, AlphaDraft will add additional games that support fantasy style games. Other popular games out there today include Valve’s Dota 2, Activision’s Call of Duty: Advanced Warfare, Blizzard’s StarCraft II and Nintendo’s Super Smash Bros.
“We have talked with a few game publishers already about games that haven't even been released yet to discuss how we can help them grow an eSports and fantasy community around their game to increase interest, viewership and engagement,” Reilly said. “With companies like Riot Games' success with eSports, this will only grow over time.”
For eSports fans who want to start Bowser as quarterback, their fantasy is about to become reality.