DraftKings Raise Only $70m In Latest Round of Funding
The recent reports of 21st Century Fox cutting their value of their $160 million in DraftKings by 60 percent “based on information concerning DraftKings’ current valuation in a recent financing transaction” has got many asking further questions as to the long term viability of DFS in the US.
According to reports DraftKings recently managed to raise only $70 million from investors which is way less than what they raised in previous rounds of funding.
The turmoil of the daily fantasy sports market shows no sign of letting up and perception often dictates the reality on the ground. Both DraftKings and rivals FanDuel did not in their worst nightmares expect the last few months to be as bad as they have been. After both companies spent hundreds of millions of dollars on pre NFL advertising, the insider trading scandal broke which has since led to regulatory probes popping up on a weekly basis.
The end is not in sight as the legal status of DFS is been challenged by many states as the federal government sits on the sidelines and has not come up with a clear policy as to where they are headed in terms of regulation.
This latest report of the $70 million round of funding is just part of the symptoms of an industry that has become a victim of its own success. Many believe that the marketing and advertising blitz by both DraftKings and FanDuel were the ultimate reason why legislators started asking the obvious questions as to how millions can be given away in prizes in an industry that claims not to be gambling.
The expansion of DraftKings and FanDuel to overseas markets like the UK is a move which has yet to prove itself and many doubt DFS will be able explode there as legalized sports betting is available on the thousands of high street bookmakers which are prevalent all over the country.