FanDuel

FanDuel Group is a New York City headquartered gaming company that offers sportsbook, daily fantasy sports, online casino and online horse race betting products. Originally founded in 2009, the company operates sportsbooks in a number of states including New Jersey, Pennsylvania, Indiana and West Virginia; an online horse race betting platform; and a daily fantasy sports service.[2][3][4]

FanDuel Group
FoundedJuly 2009
TypeSubsidiary
PurposeGambling
HeadquartersNew York City, United States[1]
Membership
6 million
OwnerFlutter Entertainment
Key people
Matt King
Carl Vogel
David Nathanson
Staff
1,001
Websitefanduel.com

In May 2018, FanDuel agreed to merge with the US operations of Irish bookmaker Paddy Power Betfair (now Flutter Entertainment). Flutter Entertainment's U.S. operations were merged under the FanDuel brand, seeking to leverage FanDuel's existing brand recognition and user base to expand its U.S. sports betting business.

History

FanDuel was founded by Nigel Eccles, Lesley Eccles, Tom Griffiths, Rob Jones and Chris Stafford on July 21, 2009, as a pivot from Hubdub, a news prediction site, after taking in $1.2 million in venture capital funding from Pentech Ventures and Scottish Enterprise.[5][6] In 2010, FanDuel held its first "FanDuel Fantasy Football Championship (FFFC)." The event consisted of ten users who won entry into the event by winning a qualifying league throughout the NFL season. First place was awarded $25,000 and the total prize pool was $40,000.[7]

On January 30, 2013, FanDuel announced that it had closed an $11 million Series C funding round. In September 2014, the company announced $70 million in Series D funding. In July 2015, FanDuel announced a Series E funding round of $275 million[8] leading the company to be valued at over a billion dollars.

In May 2015, FanDuel hired 38 of 42 employees that were laid off by Zynga 365 sports. Shortly after announcing the Series E fundraise, FanDuel acquired sports analytics company numberFire. Then in July 2015 FanDuel made its second acquisition in app developer Kotikan. Kotikan developed FanDuel's mobile app, and it was decided that they would be brought in house to help further develop mobile offerings.[9] In September 2015, FanDuel acquired the esports focused DFS service AlphaDraft.[10]

In October 2015, The New York Times reported that an employee of DraftKings inadvertently released data before the start of the third week of NFL games and won $350,000 on the FanDuel website.[11] DraftKings stated that the employees could not have used their information to make decisions about FanDuel lineups. FanDuel and DraftKings have since prohibited their employees from playing in contests for money on rival websites.[12] At the time of the incident the company released a statement that DraftKings' employees had won up to 0.3% of the $2 billion of prize money that FanDuel has given out. In a separate analysis it was shown that 91% of the player profits at DraftKings and FanDuel were won by just 1.3% of players on the website.[11]

On November 18, 2016, DraftKings and FanDuel announced an intent to merge. The combined company would serve over five million users.[13] On June 19, 2017, the Federal Trade Commission (FTC) announced that it would seek a preliminary injunction to block the then proposed merger. The FTC stated that the proposed transaction would give the combined company 90% of the DFS market, which it considered to be a monopoly position.[14] The merger was subsequently terminated.[15][16]

In September 2017, FanDuel and DraftKings each paid $1.3 million to settle with the Massachusetts Attorney General's office over allegations of unfair and deceptive practices by the companies prior to 2016.[17] In November 2017, Nigel Eccles left the company. He was replaced as CEO by Matt King, who was previously CFO.[18] Co founder Tom Griffiths left the company shortly thereafter, replaced by Nik Bonaddio, formerly of NumberFire, as Head of Product.[19]

Acquisition by Paddy Power Betfair, expansion to sports betting

In May 2018, Ireland-based bookmaker Paddy Power Betfair announced its intent to acquire FanDuel. Paddy Power Betfair planned to contribute $158 million and merge its existing assets in the United States (which also include the horse racing oriented cable networks TVG Network and TVG2) into FanDuel; Paddy Power Betfair holds a 61% controlling stake, with the option to increase its stake to 80% and 100% over time.[20]

The merger came in the wake of the Professional and Amateur Sports Protection Act of 1992 — which effectively outlawed sports betting in almost all states in the United States — being declared unconstitutional by the Supreme Court. FanDuel had been preparing to offer a sports wagering platform, while Paddy Power Betfair stated that the merger would make it "exceptionally well placed to target the prospective sport betting opportunity."[20] FanDuel will serve as Paddy Power Betfair's primary operating brand in the United States.[21]

The merger was completed on July 11, 2018, with the combined company of FanDuel and Paddy Power Betfair's US operations becoming known as FanDuel Group.[22] The FanDuel board valued FanDuel's stake in the merger at $465 million, which was significantly lower than FanDuel's internal valuation and resulted in a $120 million lawsuit in Scottish court by the company founders including Lesley Eccles, the former head of marketing for FanDuel.[23][24] Subsequently in February 25, 2020 over 100 former employees, company founders and early investors filed suit in New York against FanDuel's board for breach of fiduciary duty in allegedly undervaluing FanDuel to enrich themselves.[25][26]

A few days after the merger was completed, Paddy Power Betfair opened its first FanDuel branded sportsbook at the Meadowlands Racetrack in New Jersey.[27][28] In March 2019, a FanDuel sportsbook opened at Valley Forge Casino Resort in Pennsylvania.[29] FanDuel also offers online sports betting in Indiana, New Jersey, Pennsylvania, and West Virginia.[30][31]

In August 2018, FanDuel announced that it had partnered with Minute Media to create The Duel, a new site for fantasy/sports betting information generated by fans.[32] In November 2018, FanDuel became the first official daily fantasy and sports betting partner of the National Hockey League, in a multi year contract which grants FanDuel exclusive DFS rights.[33][34] In February 2020, FanDuel reached an agreement with Scientific Games to serve as the technology partner for its current and future sports betting operations.[35]

In 2019, Paddy Power Betfair, now known as Flutter Entertainment, acquired Canadian gaming operator The Stars Group. As part of the sale, Fox Corporation (which took a minority stake in The Stars Group as part of a joint venture to offer Fox Sports-branded sports betting services) has the option to acquire 18.5% of FanDuel Group in July 2021.[36]

In December 2020, Flutter Entertainment announced that it had increased its stake in FanDuel Group to 95% in a $4.1 billion cash-and-stock deal.[37][38]

Awards and recognition

2016
  • Webby Awards: Judges Selection: Best Sports App (Handheld Device)[39]

2015
  • Webby Awards: Judges Selection: Best Sports App (Handheld Device)[40]
  • Webby Awards: People's Choice Award: Best Mobile Sports App[41]
  • Inc Magazine: Best Industries[42]
  • Fantasy Sports Trade Association (FSTA) Best Daily Fantasy Sports Contest, Best Daily Fantasy Mobile App and Best Fantasy Live Event.[43]

2014
  • FSTA's Best Daily Fantasy Product for both Web and Mobile[44]

2013
  • FSTA's Best Fantasy Contest[44]
  • Nominated for the Europas Best Gaming or Social Games Start Up 2013[45]
  • Mashable Sports Innovation Index Winner 2012[46]

2012
  • Mashable's Sports Innovation Index & FSTA Most Outstanding Fantasy Contest[47]

2010
  • Techcrunch Best Sports and Entertainment Award[48]
  • Heraldscotland.com Global Ambition Award[49]
  • TechCrunch's Best Sports and Entertainment Startup[50]

References
  1. Paul Sawers (July 20, 2015). "Fresh from $275M funding round, fantasy sports firm FanDuel acquires app development firm Kotikan". VentureBeat.
  2. Reagan, Brad. "A Fantasy Sports Wizard's Winning Formula". Wall Street Journal.
  3. DiFino, Nando. "Instant Gratification in Daily Fantasy Sports Over Traditional Leagues". Wall Street Journal. Retrieved 18 March 2012.
  4. Brennan, John. "FanDuel Crossover Customers Fueled Major Growth In 2019". New Jersey Online Gambling.
  5. King, Bill. "FanDuel delivers daily dose of fantasy. games". SportsBusiness Journal. Retrieved 18 March 2012.
  6. Butcher, Mike. "FanDuel turns fantasy sports betting into a social game". TechCrunch. Retrieved 18 March 2012.
  7. "2010 FFFC Final Standings & Winning Lineup". rotogrinders.com.
  8. Lora Kolodny (14 July 2015). "Fantasy Sports Create Billion-Dollar Startups". WSJ.
  9. Butcher, Mike. "After Raising $275M, FanDuel Acquires App Developer Kotikan". Kotikan.
  10. "FanDuel acquires AlphaDraft to get into esports".
  11. Gaines, Cork. "DraftKings employees reportedly won nearly $6 million playing daily fantasy sports at rival FanDuel". Business Insider.
  12. Needleman, Sarah. "FanDuel, DraftKings Ban Employees From Playing Daily Fantasy Contests for Money". Wall Street Journal.
  13. "DraftKings and FanDuel Agree to Merge". The Wall Street Journal. Retrieved 18 November 2016.
  14. "The FTC is attempting to block the DraftKings-Fanduel merger". TechCrunch. Oath. Retrieved 19 June 2017.
  15. Schiffer, Alex. Federal judge orders temporary stop to DraftKings, FanDuel merger. The Washington Post. 21 June 2017. Retrieved 3 August 2017.
  16. Spangler, Todd (2017-07-13). "DraftKings, FanDuel Scrap Merger Plans After FTC Opposition". Variety. Retrieved 2017-07-13.
  17. "DraftKings, FanDuel settle with Massachusetts for $1.3M apiece". ESPN. 7 September 2017.
  20. Roettgers, Janko (2018-05-23). "FanDuel Acquired by Paddy Power Betfair". Variety. Retrieved 2018-07-09.
  21. "FanDuel Plans Sports-Gambling TV Shows as Betting Parlors Open". Bloomberg.com. Retrieved 2018-07-31.
  22. "Paddy Power Betfair, FanDuel Complete Merger; TVG Now Part Of FanDuel Group". Paulick Report. Retrieved 2018-07-31.
  23. "FanDuel Founders Suing For $120 Million After They Got Nothing In Sale To Paddy Power Betfair". Legal Sports Report. 2018-08-15. Retrieved 2019-10-25.
  24. "FanDuel founder bets on love with new app". Crain's New York Business. 2019-09-20. Retrieved 2019-10-25.
  25. "FanDuel founders spin juicy tale in suit against KKR, Shamrock. The funds have a different story". Reuters. 2020-02-26. Retrieved 2020-09-09.
  26. "FanDuel Founders, Former Employees Sue Over Getting Nothing in Deal". Wall Street Journal. 2020-02-25. Retrieved 2020-09-09.
  27. "FanDuel to open sportsbook at Meadowlands". ESPN.com. Retrieved 2018-07-31.
  28. Nick Corasaniti (11 June 2018). "New Jersey Legalizes Sports Betting". The New York Times.
  29. Gelman, Bill (March 14, 2019). "FanDuel Sportsbook Opening Festivities Just A Precursor To March Madness". Play Pennsylvania. Retrieved March 14, 2019.
  30. Maykuth, Andrew (July 29, 2019). "Fantasy sports giant enters Pennsylvania betting market". The Philadelphia Inquirer. Retrieved October 28, 2019.
  31. Waters, Matthew (November 7, 2019). "FanDuel Sportsbook Reports Strong Growth; Fox Bet Performs As Expected". Legal Sports Report. Retrieved November 7, 2019.
  32. "FanDuel, Minute Media Partner to Create Fan-Driven Fantasy, Betting Site". www.sporttechie.com. Retrieved 2019-10-25.
  33. "FanDuel Becomes Official Sports Betting Partner For NHL". Legal Sports Report. 2018-11-05. Retrieved 2018-11-06.
  34. “NHL Makes FanDuel Exclusive DFS Partner and Official Sports Betting Partner, Devils Also Get In On Deal” Casino.org. 05 November 2018.
  35. Palmeri, Christopher. "'FanDuel Picks Scientific Games for Sports Betting Tech'". Bloomberg. Retrieved 2020-02-03.
  36. Duprey, Rich (2020-12-03). "Flutter Entertainment Ups Stake in FanDuel to 95%". The Motley Fool. Retrieved 2020-12-10.
  37. Goldstein, Steve. "Flutter Entertainment strikes $4.2 billion deal to control most of FanDuel". MarketWatch. Retrieved 2020-12-10.
  38. Duprey, Rich (2020-12-03). "Flutter Entertainment Ups Stake in FanDuel to 95%". The Motley Fool. Retrieved 2020-12-10.
  39. "Sports".
  40. "Sports (Handheld Devices)".
  41. "FanDuel". webbyawards.com.
  42. "Dominating Fantasy Sports, One Day at a Time". Inc.com.
  43. "FSTA Announces 2015 Industry Award Winners - FSTA".
  44. "FSTA Award Winners - Fantasy Sports Trade Association". fsta.org.
  45. "Archived copy". Archived from the original on 2013-01-20. Retrieved 2013-02-12.CS1 maint: archived copy as title (link)
  46. "FanDuel Wins the Mashable 2012 Sports Innovation Index Award!". FanDuel Insider.
  47. Lauren Drell (11 December 2012). "Mashable". Mashable.
  48. "PE HUB » FanDuel Closes Series C". PE HUB.
  49. http://www.heraldscotland.com/business/corporate-sme/digital-business-awards-to-show-how-technology-can-aid-success-1.1048379
  50. Mike Butcher. "The Europas European Startup Awards 2010 – The Winners and Finalists". TechCrunch. AOL.
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