Daily Fantasy Sports Players Increase Annual Spend To $465
The topic of daily fantasy sports in the U.S. is receiving increased media coverage as some of the largest names in American sports are partnering up with the big players. Without a doubt the largest stakeholders are DraftKings and FanDuel but the recent entry of Yahoo into the DFS sector has shown just how mainstream the fairly new form of online gaming has developed.
The recent funding received by FanDuel and DraftKings show just how much potential investors see in these franchises who are both valued at over $1 billion each. Despite their rapid growth the reality is that both DraftKings and FanDuel are in a frenzy to grab as much market share as possible. In fact both companies are not even profitable at the current time. All the millions raised are being poured into marketing and player acquisition efforts which are seen as key to building long term growth. The question as to why these companies are worth so much despite not being profitable was raised recently on CNBC where Eiler’s Research analyst Richard Krejcik gave some fascinating insights into the industry’s inner workings.
Krejcik quoted figures from the Fantasy Sports Trade Association (FSTA) which showed that the Average Annual Spending Per Fantasy player in 2015 was $465 compared to $95 in 2012. The pace at which daily fantasy sports is growing can also be seen from the number of players engaging in DFS which numbers 56 million in North America. To put this in perspective there were only around 1 million in 2005 according to the FSTA. With these figures in mind it is no surprise that some of the world’s largest internet and sporting brands are being very generous in investing with the daily fantasy sports sector.