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Market leader FanDuel's latest numbers show the way.
If you ever doubted the potential of the daily fantasy sports betting business, think again; the latest numbers from one of the market leaders illustrates the boom that is being experienced as US players in particular flock to d.f.s. sites and pay to predict the fortunes of their imaginary teams for fun and hopefully profit.
FanDuel this week reported full year revenues of $57.3 million, a massive 298 percent year-on-year rise, with the operator paying out $564.4 million in prizes. That’s up from about $14 million the previous year and $1.2 million in 2011.
Founder and CEO Nigel Eccles (40) says that he's in the business for the long haul and has his sights set on building a multibillion-dollar business.
New York-based FanDuel has over a million paying users and controls about two-thirds of the d.f.s. market.
The company, which was valued at more than $1 billion during its last investment round according to some sources, has raised $88 million from investors including Comcast; private equity firms Shamrock Capital Advisors and KKR; and the National Basketball Association
It's biggest rival is Boston-based DraftKings, which has attracted $76 million in venture capital.
Eilers Research predicts that this year the d.f.s. sector will collect more in entry fees than all the sports books at Vegas casinos combined.
Eccles says that FanDuel can rake in $27,500 in entry fees per second, and that he plans to expand the number of live contests, including some at the Playboy Mansion. He’s also talking with sports channels about producing a reality show about fantasy players to heighten the sector's profile.
He revealed to reporters recently that the average new customer acquisition cost is $70, but retention is good.
“In what other business do you buy a customer for $70 and that user generates $100 per year indefinitely?” he asks, pointing out that good marketing of a good product is the key to success.

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