Fantasy Sports Leagues Show Up on Bottom Line
Matuszewski, Erik, Pittsburgh Post-Gazette (Pittsburgh, PA)
Drew Dinkmeyer spent seven years as a senior investment analyst in Tampa, Fla, before deciding to pursue fantasy sports professionally.
Dinkmeyer, who's 31 and got married last year, said he earns about as much from competing in daily fantasy sports leagues as he did when he was researching international equities and domestic small- and mid-cap stocks at CapTrust Financial Advisers.
A former tennis player at Dartmouth College, Dinkmeyer is part of the fastest-growing segment in fantasy sports, which in 2012 had participants spend $3.38 billion on products, services and entry fees, according to the Fantasy Sports Trade Association. Daily-play continues to grow while traditional season-long leagues have ended with the start of the National Football League playoffs.
"It's exploded in the last couple of years," association President Paul Charchian said in a telephone interview from Minneapolis. "It's growing so fast by the time we get the research back, it's already out of date. It's gotten more investment in the past two years than in the history of fantasy sports combined."
DraftKings Inc., the Boston-based organizer of daily fantasy play in baseball, football, basketball and hockey, in November completed an additional $24 million round of funding led by Redpoint Ventures to help it expand. Comcast Ventures, the venture capital affiliate of NBC network parent company Comcast Corp., early in 2013 was part of a group that invested $11 million in FanDuel Inc., which is now averaging more than $6 million in weekly payouts.
The last few weeks of the NFL's regular season, with the majority of season-long fantasy participants out of contention unless they reached their league's playoffs or championship round, further boosted the popularity of daily-play websites for cash. They remain popular in the postseason and as the National Basketball Association approaches the midway point of its regular season, offering head-to- head competition, leagues ranging in size from three to 20-or-more participants or tournaments with thousands of entries.
Fantasy sports, in which participants draft teams of players whose success is determined by the statistics they generate, dates to the 1980s. More than 33.5 million people now play fantasy sports in the U.S., according to the trade association, with leagues based on the NFL far outpacing Major League Baseball as the most popular. Fantasy sports are gaining popularity outside the U.S. also, with leagues for soccer and cricket.
DraftKings' revenue increased 10-fold in the past year, Chief Executive Officer Jason Robins said. Two weeks ago, the company awarded a $1 million prize in its fantasy football grand final. Participants could gain entry by winning a qualifying tournament with an entry fee as low as $2.
Three weeks ago, FanDuel held its premier fantasy football event in Las Vegas, where Travis Spieth, a sales manager for a CBS and Fox television affiliate in Sioux City, Iowa, won $1 million from an initial first-time investment of $10. Spieth won the top prize thanks to a touchdown run by Denver Broncos running back Montee Ball and field goal by Nick Novak of the San Diego Chargers that vaulted him from eighth place.
"It was a surreal experience," said Spieth, 37, adding that he's played in season-long fantasy sports leagues with friends for about 15 years. "I like the regular fantasy leagues, but if your team has an injury, it might cost you your season. …