DraftKings Continue Strategic Acquisition Of Their Competitors
Over a year ago we discussed the probability of fantasy sports betting becoming an alternative to U.S gamblers looking to enjoy the thrill of gambling but with a twist. Fantasy sports betting is one of those gray areas which manages to elude the Unlawful Gambling Enforcement Act of 2006. This is largely due to the fat that there is an element of skill which makes it immune to regular gambling restrictions. Already last year we mentioned the up and coming DraftKings which have since become one of the biggest players in the fantasy sports arena.
Following their recent strategic acquisition of their rival DraftStreet they have just announced their intention of acquiring another rival competitor StarStreet. The aggressive tactics of DraftKings is simple as they simply are acquiring all their top competitors with the sole purpose of acquiring all their users. In order to help them do this they have raised another $41 million in funding from the Raine Group.
DraftKings has only been around for about two years but already stands out one of the biggest fantasy sports companies around. The secret to their success lies in the fact that they offer players daily cash prizes which is in contrast to their competitors who offer monthly or seasonal prizes. In fact DraftKings claim that they will be giving way over $200 million in prizes this year with no less than four $1 million monthly prizes. To put this in perspective they only gave away $100,000 during their first NFL season when they started two years ago.
Their recently acquired DraftStreet has managed to retain some most of their team and still maintains offices in New York. Much of the funding raised will go to improving DraftStreet’s mobile acquisition. It remains to be seen if legislators will change she status quo of fantasy sports betting as critics point out that with real cash prizes on offer, there is little or no difference from that of real money gambling.