FanDuel's CMO explains how it plans to use media in 2020 to fuel its betting business, as rivals like DraftKings and Barstool make big moves
Reuters
- FanDuel is ramping up content production in 2020.
- The company is prioritizing deals that can expand its sports-gambling audience, including partnerships with traditional TV, digital-media deals, and influencer partnerships, CMO Mike Raffensperger told Business Insider.
- Acquiring customers is one of the most expensive parts of running a betting operation, and is part of the reason gambling companies like Penn National are trying to get media companies like Barstool Sports in their corners.
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FanDuel has been one of the early winners in legal US sports betting.
The daily-fantasy-sports company, which was facing federal inquiries about its business model just four years ago, jumped into sports betting as soon as the US Supreme Court opened the door for more states to legalize in it in 2018, and quickly gobbled up market share.
Daily fantasy sports games offer cash prizes but are generally considered games of skill, and aren't regulated like sports gambling. But the combination of that business model with legal gambling can create a flywheel that has given FanDuel and rival DraftKings a big boost in the US.
In 2019, FanDuel had the largest sports-gambling market share in the US state of New Jersey, which was home to more legal wagering on sports than anywhere in the US except Nevada. It was also the leader in Pennsylvania.
FanDuel was bought in 2018 by a European gaming operator, Flutter Entertainment, formerly Paddy Power Betfair, which helped the daily-fantasy-sports company quickly establish betting operations in key states. FanDuel also had existing customer base of sports fans it could funnel to the new service.
It's still early days, and FanDuel has been bested in other markets. Other gaming operators are also coming for its lunch. Its chief rival, DraftKings, has been making moves in the hopes of dominating in sports betting, including plans to go public later this year. Regional-casino owner Penn National is also buying a stake in Barstool Sports in an attempt to challenge the daily-fantasy-sports competitors. More deal-making could be on the way as other gambling operators try scale, quickly.
FanDuel chief marketing officer, Mike Raffensperger, broke down for Business Insider how it will be approaching media deals in 2020 as it defends its territory, and how a focus on mobile-betting helped the company secure its early lead in sports betting.
FanDuelMike Raffensperger.
FanDuel is ramping up content production in 2020
As gaming companies like Penn National ink equity deals with media companies like Barstool Sports, FanDuel is also ramping up its own content production to reach more sports gamblers.
Acquiring customers is one of the most expensive parts of running a betting operation. It's part of the reason Penn National, a regional player, is buying Barstool.
FanDuel, for its part, is pursuing deals with both traditional and digital media companies, as well as influencers, and growing its own production capabilities out of a Los Angeles, California studio it inherited through its deal with Flutter.
"While we're obviously a gaming company, we're also a technology company," Raffensperger said. "We're an entertainment company. We're a media company."
FanDuel is looking to partner with more local broadcasters and sports networks to get its brand in front of sports fans and getting casual viewers familiar with betting. It already has deals with regional sports networks NBC Sports Philadelphia and the MSG Network to co-create content for sports-news broadcasts, pregame shows, or live sports broadcasts.
"We have an incredible amount of data and incredibly rich narrative you can tell around popular bets or how the line has shifted throughout the course of the game," Raffensperger said. "I think you'll start to see more and more of this of sports betting and more widely adopted around the country."
It's also been making use of the Los Angeles production studio - home of horse-racing betting channel, TVG Network - that it acquired through the Flutter deal. FanDuel produces a weekly sports-betting show, "More Ways to Win," there. It runs on the TV channel and digital platforms.
In digital media, FanDuel has a deal with Minute Media, a UK-based media company that has been acquiring digital sports-media brands like The Big Lead and The Player's Tribune, to co-create original sports-gambling content under the digital brand, The Duel. The website helps send audiences to the FanDuel sportsbook through ads and links.
The company is also working with influencers to create more regional content designed for the US states where sports-betting is legal. It has a deal with former NFL player Pat McAfee, who played for the Indianapolis Colts, which includes guest spots on "More Ways to Win" and other FanDuel programming, hosting daily fantasy contests, and appearances up at FanDuel's physical sportsbook locations.
Barstool is another big partner of FanDuel's, at least for now. FanDuel has created sports-betting programming with Barstool, co-hosted events, worked Barstool talent like founder Dave Portnoy, and advertised on Barstool's digital platforms.
FanDuel declined to comment on the future of its relationship with Barstool. But Barstool's deal with Penn National stipulates that the media company won't be able to accept ad deals from other sports-betting and online-casino companies after its current contracts expire later this year. It's also supposed to promote Penn National's gaming properties exclusively.
"Barstool has been a great partner of ours," Raffensperger said in the interview, which was on January 16, before the Barstool-Penn National deal was announced. "We really value that relationship."
FanDuel is bringing live sports into its betting app
Last year, FanDuel began experimenting with streaming sports within its betting app, through a deal with Sportradar AG. The idea was to allow gamblers to bet on the game and then watch the outcome of that game all within the same app.
So far, it's only streamed a few matchups, including golf, tennis, and European soccer matchups, that it was able to get the media rights for. Raffensperger said that the company has generally seen a lift in betting activity in the markets where it offers live streams.
"We had an opportunity to pick up sort of a slice of rights for some of those matches and generally it's gone extremely well," Raffensperger said. "We're looking for more and more opportunities to do things like that."
FanDuel has focused on building a better mobile-betting experience
Overall, Raffensperger said FanDuel owes its early lead in sports betting to mobile betting.
The company prioritized states that allow mobile betting, like New Jersey, Pennsylvania, Indiana, and West Virginia, and making the mobile experience more intuitive than illegal, offshore operators or competitors. Raffensperger said features like free-to-play games with cash prizes, a broad range of bet types, and a customer-service call center, made a big difference.
"Mobile is the lion's share of opportunities," Raffensperger said. "The immediacy and the convenience of digital and mobile will transform sports betting."
In New Jersey, as an example, online betting generated $489 million, or nearly 90% of all wagering on sports during the month of December.
FanDuel's parent company Flutter Entertainment reported 76 million pounds in revenue from its US sports business, which includes FanDuel, during the third quarter, the most-recent period reported, up 55% year over year. It said it has more than 250,000 online sportsbook customers in the US in the November release, up from 200,000 in October. Flutter does not break out FanDuel's business in its filings.
In 2020, one focus area will be improving the FanDuel experience for people who have both daily-fantasy-sports and sports-betting accounts, Raffensperger said.
"How do we connect those and make the user experience and the user account as seamless as possible?" Raffensperger said.
Read more about how media companies are leveraging legal sports betting on BI Prime:
- Barstool and Penn National execs share new details about their blockbuster $163 million deal, from the first meeting in July to plans for a new betting platform: Penn National's deal to acquire a minority stake in Barstool Sports started with a July meeting between the two companies in New York.
- Why a casino company just took a big stake in Barstool Sports, and how it sets the stage for more media-gambling deals: The Barstool deal could spur, and set the tone for, future deals between media companies and sports-betting operators.
- Inside Barstool Sports' strategy to become advertising's gateway to gamblers with its new sports betting app, Barstool Bets: Barstool wants to build a robust database of new and experienced sports betters to attract new advertising dollars, and revenue streams, like affiliate, as more states legalize the activity.
- Inside Bleacher Report's strategy to win over sports gamblers, who it says are 5 times more engaged with its app than other sports fans: Bleacher Report wants to woo casual bettors with entertaining betting-related programming, like its forthcoming "B/R Betting Game Show," its CEO said.
- How much money media companies can make by referring gamblers to sports-betting platforms: The CEO of affiliate firm Gambling.com CEO breaks down exactly how much his company makes from sending gamblers to legal sports-betting apps.
- Meet the 22 power players leading the explosion of the US sports betting space: These are the top execs championing legal sports-betting at the major US media brands, sports leagues, and gaming companies.
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