2. Solution to a Problem
● Allows people to gamble online
● Additional fantasy sports games
● No need to physically travel to the casino for sportsbooks
3. Daily Fantasy Sports
● Create a team of players
● Score points based on performance
● Top scoring team wins jackpot
4. Brad: Persona 1
● 35 years old
● Dedicated to watching sports every weekend
● Extensive knowledge of team and player stats
5. Billy: Persona 2
● 25 years old
● Casual sports watcher
● Loves watching sports with friends
Fanduel was established in 2009 and is headquartered in New York City. It is currently publicly traded under the parent company Flutter Entertainment.
Fanduel was founded to give people the ability to play daily fantasy sports online where users can win every day and start over the next day. Later on, it expanded to online sports gambling where users no longer needed to sports gamble through a “bookie” or physically travel to the casino to place sports wagers. Lastly, they expanded to the casino market with online table games and slots to further accommodate their users’ needs.
Here is an example of fanduel’s very first product: Daily Fantasy Sports. Each user pays into the prize pool and creates their team of players. In this case it is a team of baseball players. The players each earn points for the team based on performance and the team with the most points at the end of the day wins the jackpot.
Fanduel’s daily fantasy sports is catered towards people who love sports and spend a lot of time researching teams and player stats to create the best possible fantasy sports team
Fanduel’s sportsbook is catered toward people who like watching sports and want to make the game a little more interesting with some money on the line.
The data about the earnings of fanduel prior to 2018 is scarce since it was not publicly traded until 2018 when it was bought by flutter entertainment, however by the end of quarter 4 in 2014 their revenue was over 35 million dollars and they had over a million paid, active users. Fanduel would go on to continue this growth and was valued at 1 billion dollars by the end of 2015.
Here is the revenue and earnings of fanduel’s parent company Flutter Entertainment. Fanduel was acquired by flutter in 2018 and you can see on the graph that there was steady growth in revenue after the merge
This graph is a bit blurry but you can see the huge spike in users after fanduel launched their sportsbook and there has been continued growth ever since.
How does fanduel make money? Fanduel collects 10% from users who pay for league buy-ins. So for every $1 paid by a user, the company takes 10 cents. The same goes for their sportsbook as you only win 90 cents for every dollar that you bet. Fanduel spends a ton of money each year on promotions and advertising to increase their user base. FanDuel’s TV advertisement spending is estimated to be about 20 million dollars, resulting in an average customer–acquisition cost of $68. Despite the high acquisition cost, FanDuel makes $100 off each customer per season resulting in a profit.
Fanduel was founded in 2009 by nigel, lesley, and tom, who wanted to give fantasy sports lovers a way to play fantasy sports every day
Fanduel was founded on July 21, 2009 after taking in $1.2 million in venture capital funding. It began as exclusively a fantasy sports site. After several years of gaining capital, by 2015 it was valued over 1 billion dollars. In 2016, FanDuel and their primary competitor DraftKings proposed a merger. This merger would have grown the customer base for the combined operations to over five million users. The new company would have covered an estimated 90-percent of the daily fantasy sports market. In June 2017, the Federal Trade Commission made both companies aware they would be attempting to block the merger as a violation of anti-trust law. Rather than fight the FTC, the merger idea was dropped. Shortly after the merger between fanduel and draftkings was dropped, fanduel merged with Paddy Power Betfair,(also known as Flutter Entertainment), an irish based bookmaker who was interested in expanding to the american markets since sportsbooks had recently become legal in a few states. Most recently, fanduel sportsbook has expanded to michigan as it legalized online sports betting this past january
The secret sauce is the way they get new users and retain these users through ads and promotions. They offer your first bet risk free up to 1000 dollars to get users to sign up for their site. Additionally, they frequently offer a guaranteed win on a 50 dollar bet in order to get users to deposit to the site hoping that they will use the money after they win.
There are a ton of online sportsbooks out there. Fanduel’s main competitor overall is draftkings. Fanduel and draftkings both set themselves apart from barstool sportsbook and other online sportsbooks with their daily fantasy sports which other sites do not have. As far as the sportsbook goes, they are all basically the same. They all have their own promotions and this is the primary way they attract users to use their site over other sites. In my opinion, fanduel has the best promotions, but this is very subjective as users are attracted to promotions for various personal reasons such as promos on specific sports of interest. They also get exclusive sponsorships to put themselves ahead of the competition. For example, draftkings is an official sponsor of the NFL and fanduel is an official sponsor of the NHL.
With the legalization of online sportsbooks spreading to new states every year, new sportsbook sites are popping up constantly to claim their share of the market. Everyone runs a huge promotion to get a user to sign up for their site, but most will not retain these users. The users that do get hooked on gambling will default to one or two main sites which I would expect to be fanduel and draftkings. Lastly, if you are interested in investing in these online gambling sites, i would personally recommend researching when they are launching in a new state and buy stock a couple months before launch and selling a couple months after. This strategy worked well for me with penn national gaming which is the parent company of barstool sportsbook.