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FanDuel is building a business in the United States
Monday, May 7,2012 : BRIT ONLINE FANTASY SPORTS COMPANY EXPANDING (Update)
From humble beginnings in Edinburgh, FanDuel is building a business in the United States
Around 40 percent of American men aged between 18 to 35 play fantasy football, says Nigel Eccles of Scots company FanDuel, making the sector an attractive target for companies with the right expertise and content. FenDuel clearly has both, doubling its staff in Edinburgh this year and opening an 8-person US office to handle increased business.
FanDuel offers a fantasy sports game that allows online betting but is exempt from the United States’ strict online gambling laws because it is classified as a game of skill, not of chance. Sports covered by the website include American football, baseball, basketball and ice hockey.
Eccles, who is a co-founder of the business says the competition is stiff, but the company raised $1.3 million last month from existing investors that include Pentech Ventures and Piton Capital, and will bring in further funding this year to finance expansion in the US.
Eccles told The Scotsman newspaper this weekend: “In the UK [fantasy sports] is niche, but in the US around 40 percent of men between the ages of 18 to 35 play fantasy football.”
The original concept for the company, first launched in 2008 branded HubDub, was to facilitate proposition bets on the outcome of news stories, but the fantasy sports element added under the FanDuel title in 2010 soon outpaced other company activity. FanDuel takes a 10 percent cut of entry fees, which range from $1 to $500 per player.
The company is now looking for larger premises in Edinburgh and pays out around $830,000 to winners each week
The Scotsman quotes Eccles on the size and potential of the US market:
“There are 30 million fantasy sports players in the US. We have converted a tiny fraction of that. Our vision is that this is the future of fantasy sports. Our users are in their 20s, while traditional players are now in their 40s. In ten years’ time, this will be the dominant way of playing fantasy sports.”
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