ON SUNDAY OF the NFL's Week 14, the 120 finalists of FanDuel's World Fantasy Football Championship filled a hotel ballroom in San Diego for a football bacchanalia. Flickering screens aired live games, celebrity hosts worked the room (Joe Montana! Dan Marino!), and staggering sums of cash (in all, $12 million in prize money) were awarded based on, in part, Blake Bortles's performance. The event was the glittering culmination of a year in which daily fantasy exploded into a billion-dollar industry. Yet you couldn't help but wonder if this was the last big bash before the lights went out.
Daily fantasy went mainstream in 2015, as commercials featuring bros boasting of winning millions off their $5 lineups became ubiquitous—FanDuel and DraftKings in one month spent more than the entire beer industry on advertising, with spots running every 90 seconds at one point—and the number of players soared. In the summer there was talk of mammoth IPOs for DraftKings and FanDuel, the two main daily fantasy operators. As recently as this fall both companies were valued at more than $1 billion. Investors included everyone from sports leagues to networks to Bob Kraft.
As quickly as it had become the entrepreneurial story of 2015, daily fantasy's arc began to resemble that of Internet poker. In October a DraftKings employee was accused of using internal data to win $350,000; the individual was cleared of wrongdoing, but the story bloomed into a full-blown national controversy, with politicians cracking down on companies they believed were illegal gambling sites exploiting a legal loophole. One minute daily fantasy was a topic during a presidential debate, the next an NFL player, Pierre Garçon, made headlines by suing FanDuel, claiming players were being exploited without compensation.
As attorneys general began investigating daily fantasy in their states, the story felt like a cautionary start-up tale: a case of too much, too soon. There will now be extensive legal proceedings and even congressional hearings. It's impossible to predict where daily fantasy goes from here. Only this is certain: In 2016 there will be—to everyone's relief—fewer of those damn commercials.
December 28, 2015
THE YEAR IN HOT TAKES
"Now women, long considered the more civilized sex, feel the need to join us louts in our crass ways? ... If women are into mixed martial arts today, what'll be their male-like misbehavior tomorrow?"
—Bud Poliquin, Syracuse.com
[The following text appears within a chart. Please see hardcopy or PDF for actual chart.]
TOTAL PRIZE POOL (MILLIONS)
Sunday Million + Millionaire Maker
2014 NFL Season
2015 NFL Season
Reports surface of a DraftKings employee winning $350,000 using internal data
Congress calls for an FTC investigation into the daily fantasy industry
Garçon files a class-action lawsuit against FanDuel on behalf of NFL players
New York AG orders sites to cease accepting bets from N.Y. residents
Appeals court judge allows the sites to continue operating in N.Y.—for now
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Source: Eilers Research, LLC