Fantasy Sports: Socializing Betting
Oct 16, 2015 8:48 AM PT
It passes through the channels of federal laws, spills across state lines and even bleeds into the protected realm of college sports. The multibillion-dollar industry that is fantasy sports has stood up to legal challenges so far, but the surging sector still battles problems with perception and faces questions about its future.
Allegations of insider trading have brought fantasy sports the type of attention industry players would prefer to duck or dismiss. With popular game types resting atop bubbles, calls for more oversight aren't the only major issue staring back at fantasy sports.
Increasingly, fantasy sports, especially the single-day format, have had to deal with negative views held by regulators and potential players alike.
No one has to wager any money to join in the weekly and seasonal variety of fantasy games, but media blitzes by DraftKings and FanDuel touting the money to be made lure new players to engage in this legal form of gambling.
Daily fantasy sports leagues, the ones that pay out daily winnings, have been surging over the last few years, just as the season-long format nears its potential. The rise of the DFS format has created an atmosphere in the U.S. that is more favorable to fantasy sports in general, according to FlowPlay CEO Derrick Morton.
"I personally see a huge potential for businesses ready to capitalize on the growing popularity of fantasy sports," he told the E-Commerce Times. They'll have to "find a way to do so in a widely legal, mass-market way in order to reach a bigger slice of the 60 percent of the U.S. population that [Gallup says] are considered sports fans."
There are still veins of gold to be mined in those mountains, but the reality of fantasy sports has been setting in. Morton gave DFS maybe three more years before it hits a ceiling, and the season-long format could be in trouble as well.
Most of the people who would play season-long fantasy sports are already doing so, noted Tim Steudler, chief strategy officer at Rebel Ventures.
"That is why you are seeing the mass blanket TV campaigns from DraftKings and FanDuel around the kickoff of the NFL season," he told the E-Commerce Times. "New users are actively being sought out by the emerging daily and weekly fantasy sites, though, and that's all about education and emotion."
Socializing New Players
For now, DFS is the most profitable format for fantasy sports. The lure there is the thrill of the wager.
That draw can pull players back even when their favorite sports have moved into their respective offseasons, notes Ben Hordell, partner at DXagency who specializes in social media and digital marketing.
"Strategically, fantasy sports organizations, especially those of the daily variety, must look to create multisport relationships with players to ensure that the offseason is as short as possible," he told the E-Commerce Times. "Baseball is a good way to fight the summer lull. If a player does go offseason, deposit bonuses are an efficient lure to resume participation."
Social media networks provide marketers and managers of fantasy sports platforms with wide-open avenues to sports fans, many of whom may have only a casual interest in gambling.
Fantasy sports sites have the potential to extend the penetration of DFS games to their social media channels by deploying campaigns containing winners' success stories, the kind of media blitzes DraftKings and FanDuel kick into overdrive when football is back on TV, according to Rebel Ventures' Steudler.
"As for keeping longtime players engaged, it's delivering constant value in assessing sports news from a fantasy angle," said Steudler. "Even in the offseason, sports don't sleep, and trades, new signings and injuries are important to avid fantasy players as they begin to prepare for their drafts months ahead of time."
There's a skill to picking the highest-scoring players each week, though the element of chance is capable of turning sure picks into flops on any given Sunday. The skill element has enabled fantasy sports to go where traditional gambling can't, even online.
However, fantasy sports have faced many of the same challenges other gambling formats have seen.
"In terms of the daily fantasy sports sites, the challenges are very similar to the online gambling world, as people can be leery about connecting their bank accounts directly to a third party," said DXagency's Hordell. "Additionally, these sites must battle the perception that the sites are already overrun by professionals and computer algorithms."
The fear of sharks circling the deposit pools is very real, and the DraftKings scandal at least showed how the DFS format could be abused.
Regulation and transparency will only benefit the industry, said Steudler. "Fans need to know that they are playing on a level playing field."
There was a time when the only platforms for fantasy sports were notebooks and white boards. Online platforms have made it easier and more compelling for people to play, facilitated the rise of the DFS format and grown into an industry worth billions.
As the market comes of age and money becomes the focus, the field of fantasy sports has been losing its innocence.
"Fantasy sports began as a social activity, and the growth in daily games is actually drawing away from that," Steudler said. "It's no longer necessary to sit down in person for drafts, to communicate weekly about trades and talk smack, and the reward is focused on dollars instead of invaluable bragging rights."