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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 :

Unibet Name Changed to Kindred Group plc - Following an extraordinary general meeting at which shareholders approved the change of the Unibet title and brand to Kindred Group plc, the online gambling group will begin trading under the new name on December 12.

Kenya Betting Control Board Reviewing Changes - Kenya's booming sports betting sector could be facing stiffer government controls, especially regarding marketing, advertising and promotions, according to local media reports revealing that parliament is studying potential amendments to the Betting, Lotteries & Gaming Act.

Britan To Tighten SpreadBetting Controls - The UK media reported widely Tuesday that Britain's Financial Conduct Authority has announced a crackdown on spread betting using contracts for difference (CFDs) following FCA research that showed 82 percent of clients had lost money in the sector.

Playtech to Buy Back 50 Milliuon in Shares - #playtech In a statement, the company said that the decision reflects continued confidence in the growth and prospects of the business and its high cash generation, and revealed that it continues to trade in-line with expectations.

Sentencing in Vietnam Gambling Bust - The People’s Court in HCM City handed down sentences Monday to dozens of defendants linked to a major online sports betting ring dismantled last year by Vietnamese police.

Gamevy in Deal With Betsson - #Gamevy says it is partnering with several leading operators to deliver bespoke content that offers a real point of difference to players and increases brand loyalty.

Pkr To Offer Virtual Sports - #pkr The long established and respected online poker and casino operator PKR.com has followed its switch to Microgaming's MPN network earlier this year and the more recent launch of its live dealer offering with a new Virtual Sports attraction powered by Kiron Interactive.

Boris Becker New PartyPoker ambassador - #partypoker To celebrate the signing PartyPoker has created a Beat the Ace competition in which players get the opportunity to test their skills and luck in four $5,000 freerolls which started December 5. The overall winner will then get to play Becker heads up live in Germany for up to $25,000.

Snowmania Slot Launches - Capturing the festive feel in the now chilly northern hemisphere, RealTime Gaming has released its December offering, a 5 reel, 20 pay-lines online slot with a jackpot of 37,500 coins.

SportPesa is negotiating a major sponsorship deal with Everton - #SportPesa The Kenyan retail and online sports betting firm SportPesa is in the football sponsorship headlines again just days after news that it has inked a multi-million pound partnership with Hull City FC.

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