DraftKings rides fantasy sports to unicorn status – CNBC
On Monday, DraftKings, which ranked No. 45 on the 2015 CNBC Disruptor List, secured another $300 million in funding and is now valued at $1 billion—putting it firmly in the elite club of Wall Street unicorns. Its investors include Disney, which owns ESPN, Fox Sports, Major League Baseball, the National Hockey League and Major League Soccer.
Robins said there is a synergistic relationship between the site and its investors.
“When people play Draft Kings’ fantasy products they tend to watch more games, they tend to be more into the statistics and doing research on the games,” he said.
“All of the games around the league are interesting to them, not just those from their home team or just those that have playoff implications,” Robins added. “Even when a game is a blowout, its fun down to the last moment because fantasy statistics are still being accumulated.”
Draft Kings’ main competitor has been FanDuel, whose investors include NBC Sports, and the National Basketball Association (NBA). Now Yahoo has also entered the game, launching a daily sports fantasy site earlier this month. For his part, Robins said he welcomes the competition.
“Yahoo is going to introduce a lot of new consumers to the game, and their entrance into the market is just further proof that this is a rapidly growing space that’s very exciting,” Robins said. Yet he believes DraftKings differentiates itself by having a better platform than its competitors.
“When we’ve done consumer research, our product is generally rated higher than anyone else’s product out there,” said Robins.
The interest is clearly there. Fantasy players currently spend an average of $465 a year on games, according to the Fantasy Sports Trade Association.
Because the games are considered games of skill rather than luck, fantasy websites aren’t subject to online gambling laws.
“If you look at the data and play the game it’s pretty clearly without any sort of debate a game of skill,” said Robins. “You can predict what others are going to do—there is a tremendous amount of statistics out there.”
Disclosure: NBC Sports is owned by Comcast, which is also the parent company of CNBC.
—CNBC’s Stefanie Kratter contributed to this report.
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