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DFS Companies Cutting Advertising

Tuesday August 2,2016 : DAILY FANTASY SPORTS COMPANIES TO CUT BACK ON ADVERTISING
 
Market leaders both planning serious reductions in adspend.
 
Fearing a regulatory push back on perceptions that they are promoting online gambling, daily fantasy sports market leaders FanDuel and DraftKings are planning a drastic reduction in adspend, according to a report in the Wall Street Journal Monday.
 
In a desperate race for players and market supremacy, the two companies saturated sports television with their adverts, triggering intense scrutiny when an insider information scandal created havoc and falling revenues last year
 
The repercussions continue to reverberate through the industry as individual US states debate whether the genre is legal or not in online gambling terms.
 
FanDuel CEO Nigel Eccles confirmed to the Journal that his company was reducing adspend to de-emphasise big jackpots and other aspects of playing daily fantasy sports that resemble gambling.
 
The Journal reveals that FanDuel and rival DraftKings raised major funding from investors and together spent an estimated $500 million on advertising in 2015.
 
This increased brand recognition and the number of users, and FanDuel’s revenue nearly doubled to about $100 million in 2015.
 
However, in cost-per-player terms it was expensive at around $174 per new player at DraftKings and $123 at FanDuel, creating operating losses for the companies.
 
When the "insider" scandal broke the situation rapidly deteriorated, in part due to the massive advertising exposure the companies had achieved which attracted intense regulatory, enforcement and legal scrutiny.
 
The companies soon found themselves spending increasing amounts on lobbying, litigation and fighting adverse market perceptions, along with the expense of making changes to a more acceptable way of operating.
 
Eccles told the Wall Street Journal that his company will cut adspend to less than half this year, compared with 2015, whilst DraftKings CEO Jason Robins revealed that his company plans to spend less than a quarter of the 2015 adspend it invested.
 
The FanDuel chief executive says that the new advertisements for his company will tie fantasy sports to the emotions wrapped up in being a sports fan, introducing the term “sports-rich,” to try to steer clear of the gambling association.
 
FanDuel had a cash balance of about $50 million in May 2016, down from $274 million last June, according to recent financial filings, and announced that it would have adequate funding for the next 12 months.
 
However, it warned that its future could be threatened if individual US states bring more regulatory or legal challenges.

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Gambling News :

Oryx in deal with Extreme Live Gaming - #oryx Turnkey provider ORYX has selected Extreme Live Gaming for the integration of a number of Live Casino titles to its games platform.

GAN Partners with Station Casinos - B2B online gaming company GAN (formerly Game Account Network) has revealed Station Casinos as its previously unidentified partner in an announcement made August 2016

Tipbet Sponsor of easy Credit Basketball Bundesliga for season 2016/2017 - #tipbet The agreement comes with good timing; the BBL basketball 2016/17 season started last Friday, ensuring that Tipbet benefits from high visibility for its brand presence at the games.

Oceanís Call Slot Launches - Online gambling games developer Habanero has embarked on a journey across the high seas to bring players its latest HTML5 high resolution slot title, Oceanís Call.

Big Names Playing WCOOP - The big names came out to play in the closing stages of the World Championship of Online Poker this week as major prizes were handed out in a number of exciting and entertaining competitions.

Should Gibraltar and Britain be regarded as a single state under EU gambling laws? - The issue has been referred to the ECJ by the High Court with the question "should the UK and Gibraltar be treated as a single member state when it comes to EU law on remote gambling?"

Sirplay to Open Argentina Branch - #SirPlay expects the new office to be fully operational by early next year, extending its service to Grupo Slots, which holds a license to operate the provincial San Luis Lottery, and other potential LatAm clients.

DFS Changes for Ohio - #dfs Coley says that at present DFS is an example of the "pools for profit" concept, the rules for which the state Attorney General has opined are unclear in relation to DFS.

New Jersey Teams Up With Kahnawake Gaming Commission - The New Jersey Division of Gaming Enforcement and the Kahnawake Gaming Commission have agreed to collaborate in preventing unlicensed online operators from accepting bets from New Jersey and other U.S. states through the Continent 8 data centre situated on tribal land, according to reports Tuesday from the Associated Press news agency.

Petition to Ban Online Gaming in Singapore - Singapore Pools and Singapore Turf Clubís application to operate online betting has triggered the origination of a petition that calls on the Government to deny authorization and stop legalization of online gambling.

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