- Caesars Entertainment has taken a minority equity position in the SuperDraft Daily Fantasy Sports (DFS) platform.
- The announcement comes immediately on the heels of Bally’s Corporation’s acquisition of the Monkey Knife Fight DFS platform.
- Along with their recent purchase of William Hill it’s evident that Caesars Entertainment will make sports betting a focal point of their product mix.
Didn’t I just write this article? Coming mere hours after Bally’s Corporation’s deal to acquire Monkey Knife Fight was announced another big player in the US gaming market is also taking a position in a DFS company. This time the deal is being made by Caesars Entertainment as they’ve announced a minority equity investment in the SuperDraft DFS platform. Caesars has an option to increase the stake going forward up to 100% ownership ‘at pre-determined levels’.
You know they’re not messing around when they even send along a ‘sizzle video’ with the press release:
Caesars Entertainment CEO Tom Reeg explained his company’s rationale in making the deal:
“The addition of daily fantasy sports fits seamlessly with our strategic vision for mobile and online sports. SuperDraft’s innovative multiplier game mode is unique in the marketplace, and we believe it offers a tremendous opportunity to strengthen our position in the sports gaming landscape.”
Basically, Caesars is interested in DFS for the same reason that Bally’s is:
Here’s where it gets interesting–DFS is still a very dynamic industry unto itself that pulled in revenues of $2.9 billion in the US during 2019. That’s not a bad revenue stream but it becomes even more valuable for growing a database of potential sports bettors. Think it was an accident that DraftKings and FanDuel have become so dominant in US sports betting right out of the gate? Guess again.
SuperDraft might not be as well known as Monkey Knife Fight but it still offers Caesars with many of the same positive externalities:
Operating across seven professional sports in more than 35 states, SuperDraft features a unique game mode that attracts casual fans and experienced players alike. Multiplier Mode replaces the traditional fantasy team salary cap with a multiplier applied to each player allowing maximum flexibility in team building while creating more opportunities for everyone to win.
As part of the investment, SuperDraft will join Caesars’ online brands, World Series of Poker, Caesars Online Casino, and, upon the acquisition’s close, William Hill, as part of a full slate of mobile and online gaming channels.
It also makes clear that Caesars is going to make sports betting and interactive gaming a focal point of their product mix. SuperDraft will become part of the Caesars Rewards program. SuperDraft will also become part of Caesars’ single wallet solution “allowing members more options to play both online and in-person.” Does this mean that they’ll be offering DFS at the retail level where they can do so under the state’s regulatory framework?
To get the party started right SuperDraft is launching a big money tournament:
To kick-off the partnership, SuperDraft will launch its first $1 million tournament on February 7th – the SuperMillion Big Game contest. Starting today, opportunities will be offered daily across paid and free entry contests to give anyone the chance to win a ticket and compete for the $300,000 1st place prize. Additionally, two $100,000 contests with $20,000 first place prizes will occur on Big Game Day to offer something for daily fantasy players of all pocketbooks.
Steve Wang, CEO & Founder of SuperDraft, is understandably excited to join the Caesars family:
“We’re super excited to be part of Caesars’ powerful gaming ecosystem. Daily fantasy players deserve a breath of fresh air, and we’re here to transform the industry. SuperDraft is now well-positioned to accelerate its growth with financial staying power while broadening its consumer appeal with bigger contests and better rewards to players of all interest levels.”
Nate Hunter, SuperDraft CTO and Co-Founder, shared these comments:
“Caesars is a strong strategic partner that will allow us to further enhance our industry-leading tech stack and provide an enhanced player-first experience. Now SuperDraft can adapt to the market faster than the institutional daily fantasy providers, while providing our players with unmatched prizes, loyalty rewards, and exclusive VIP opportunities.”
Will Daily Fantasy Sports become the next battleground for sports betting providers? You have to think it will for a number of reasons starting with the intrinsic revenue potential of DFS. The market in the US alone was an estimated $8.2 billion in 2020 and expected to grow 3% in 2021. The player base in the US and Canada has grown from 5 million in 1988 to more than 56.8 million today. It also allows the sports betting companies to grow their brand awareness nationwide–including states where actual sports betting is not yet regulated. At the same time, they can start to compile a customer database. This is one of the most significant reasons that DraftKings and FanDuel were able to get out of the gate so quickly when they moved into the sports betting business–they had well established brands and when their sportsbook platforms entered a new market they already had a sizable database for marketing. On a macro level, DFS is an untapped market in most of the world.
VOX had an interesting article about the economics of DFS early last year:
THE RISE OF DAILY FANTASY AND SPORTS BETTING HAS CREATED AN ECONOMY OF ITS OWN (VOX)
