Saturday, March 11, 2017

"How The Daily Fantasy Wars Almost Destroyed DraftKings And FanDuel"

TS:

It all culminated in what the companies call “Red Tuesday,” in the fall of 2015. It was September 14, the Tuesday after the first Sunday of NFL season, the biggest and most highly promoted day in DFS history. Both companies wanted to capitalize on the momentum and push new NFL users into also playing the final month of the baseball season.

“So, we were planning on launching a contest,” a FanDuel employee says. “DraftKings came out first, and they [sized it at] $1.5 million. It became the prisoner’s dilemma. Where you go, well, we could just size conservatively. And they’ll fill, and they’ll get their $1.5 million. Or, you could size ours at $1.5 million, and no one will make any money. We’ll both lose. And we chose the latter. And boy, does that data point stick out on the chart.”

The contests didn’t come close to filling. I remember it well—I told everyone I knew playing DFS to get entries in, and upped my own as well. Then I watched from Tropicana Field as the Yankees played the Tampa Bay Rays and I actually made a little money. Both DraftKings and FanDuel, however, lost hundreds of thousands on those contests alone.