Get your notebook and grab a pen, because we’re going to give you a daily fantasy sports history lesson.
This fantasy format has undergone an almost impossibly fast evolution in the last decade. From its rise in the U.S. to a big UK debut and European domination, daily fantasy sports history is constantly changing.
Covering the origins of daily fantasy, the industry’s major successes, and lingering controversies, this article will guide you through the landscape of daily fantasy sports and where the game stands today.
Origins of the Daily Game
Ironically, the U.S. 2006 Unlawful Internet Gambling Enforcement Act (UIGEA) helped daily fantasy sports come into existence. This act, which made online gambling illegal, explicitly legalised fantasy sports (Section 101, 6.D.ix).
At this point, only season-long fantasy sports was on the table. But the UIGEA, which basically obliterated online poker in the U.S., brought to the fore the growing possibilities of the fantasy format.
One of the earliest examples in daily fantasy sports history is the website Instant Fantasy Sports, established in 2007. Founder Chris Fargis, a pro poker player, wished to “take the time frame of season-long fantasy sports leagues and shrink it”.
Combining fantasy sports with elements of online poker helped create the daily format as we know it today.
FanDuel and DraftKings
The next major step in daily fantasy sports history was taken by Nigel Eccles, who founded FanDuel in 2009 as company CEO.
As FanDuel say on their About page, “the season-long game would be simplified. The winning amplified.” Interest in the site surged and FanDuel raised $1.2 million that year in venture capital funding.
In the wider fantasy industry, daily fantasy sports quickly became a popular alternative to the traditional season-long game. Dozens of daily fantasy sites cropped up in the States. DraftKings, founded in 2011, was soon to become FanDuel’s biggest competitor, especially after acquiring fellow competitor DraftStreet in 2014.
DraftKings raised just under $3 million in venture capital and investments through fundraising from 2010 to 2012.
Living the American Daily Dream
With growing popularity, daily fantasy sports players and operators alike began to live that fabled American Dream. Players could turn small entry fees into huge profits in just a day, and big sites like FanDuel and DraftKings were becoming increasingly lucrative.
Daily Fantasy Millionaires
There have since been more DFS millionaires, as can be seen in this Rotoguys article on DraftKings winners. Some millionaires have had their successes documented in the DFS film Perfect Lineup. Their success gives players something to aspire to, and many are trying out their skills to win huge sums of money.
DFS Sites Take In Billions
DraftKings and FanDuel both saw a big surge in finances in the U.S. during 2015. This is thanks, in part, to aggressive advertising campaigns. The operators spent over $200 million on national TV ads ($131.4 million from DraftKings and $74.5 million from FanDuel).
Some have argued that an oversaturation of TV ads (60,000 of them) irritated sports fans. However, the two companies took over $3 billion in entry fees last year. The fans can’t have been that annoyed!
North American DFS Players Now
Daily fantasy is huge in North America. The Fantasy Sports Trade Association (FSTA) estimates that 57.4 million North Americans are playing a form of fantasy sports in 2016. That’s up from 18 million in 2006, and translates to 16% of people living in the U.S. and Canada.
The growing popularity of fantasy sports has also fuelled interest in sports more generally. According to the FSTA, 64% of North Americans report they are watching more live sports because of fantasy. In addition, 61% say they read more about sports because of fantasy.
DFS Sails to British Shores
Given the rapid rise of daily fantasy in North America, and Britain’s love for both sports and betting, the arrival of DFS here came as no surprise.
Swim or Sink?
Commentators have mixed feelings about predicting the success of DFS in the UK. Some see a sports betting market already dominated by bookies as a daunting prospect for this new format.
CEO of SuperLobby.com David Copeland has said that “DFS sites have had virtually no traction whatsoever”. This is disputed by DraftKings’ London-based chief international officer Jeffrey Haas.
Others are more optimistic about the future of DFS in Britain. For instance, STATS.com argue there is a gap in the UK market for DFS due to the game’s unique format and style:
“Daily fantasy sports offer an alternative to sports betting […] there is much more of a personal attachment and sense of accomplishment with fantasy when a person constructs their own team and backs it with their own money as opposed to simply betting on a team to win.”
Trouble Brewing in the States
Another reason why DFS may be struggling in the UK is connected to legal issues in the U.S. States legislators have been debating whether DFS is a game of skill or an illegal game of chance.
Things have moved on in fantasy sports since the UIGEA was passed in 2006, after all. Since then, it’s difficult for legislators to ignore how much money daily fantasy sites have been making.
The legislative moves of different states are complex and ongoing; an excellent and regularly updated summary can be found on ESPN.
What does this mean for the UK? Well, DFS has a huge base of fans in the U.S., meaning more contestants to play against. Any moves towards banning DFS will have a direct impact on the number of people contributing to prize pools.
In addition, legal defences in the U.S. have been costing DraftKings – and FanDuel – a lot of money. This means they have less to spend on advertising in the UK and elsewhere.
Where Next in Daily Fantasy Sports History?
One of the major issues currently facing DFS operators is the presence of highly powerful ‘shark’ players. These players use scripting tools to enter and edit dozens, or even hundreds, of lineups at a time.
This is partly what has brought the game under scrutiny by U.S. legislators. The minority of players who use scripting tools have power far beyond that of the casual player.
Jay Caspian Kang wrote a damning exposé on this aspect of DFS for the New York Times. However, he isn’t totally bleak about the game’s future.
“There is, in theory, a version of DFS that could work. All that’s required is a transparent marketplace in which a player can reasonably expect to enter a head-to-head or 50-50 or even one of the big-money tournaments without going up against hundreds of lineups generated by professional gamblers who have been lying in wait for him.”
In the UK, online gambling is legal. This means that ‘shark’ players are unlikely to come swimming in British waters. However, many DFS sites are international – and, after all, we all want to play in an environment without predatory players.
Some sites are becoming more transparent, taking steps to tackle abuse of their line-up systems. Yahoo has put a multi-entry cap on their daily fantasy platform. They also mark highly experienced players as Veterans. Fanaments similarly ranks players with experience points.
Recently, the DFS industry has been subject of more and more regulation in the U.S. States such as New York, Virginia, Indiana and Massachusetts have legalised DFS. Hopefully, this greater oversight will cause DFS operators to properly address the issues of corruption. This will help protect the game that we know and love, allowing all players a fair chance to win.