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25-10-2021 by Maria Arnidou

iGaming History: Fantasy Sports & the Sports Betting Industry

Ever since the early 2010s, two subjects have been dominating innovation discussions within the igaming industry:

Fantasy sports and esports.

Often (and misguidedly) used interchangeably, or in the same context, fantasy sports software and esports have been promoted as the panacea to all customer acquisition and retention woes, under the guise of a “one-size fits all” rhetoric.

Experience has (or should have taught us) both the tremendous value of each offering, as well as its natural dependence on the existing market in question, and of course, the operator/client interested.

Being a fantasy sports software company, we will leave esports aside and to its experts, to discuss the realistic view on fantasy sports, their real power and more importantly, their evolution from industry rhetoric staple, to an evolving key offering.

Betting Markets & the Fantasy Sports Experience

We all know how fantasy sports - especially their original, free-to-play, season-long format - have been widely embraced by people in the UK, US, Canada and beyond, with large, vibrant online communities being active throughout the internet and social media sphere. Massive, meaningful content has been produced, based on sports statistics and fantasy points projections; and zillions of tweets sharing personal views and progress of fantasy managers have been “unleashed”.
Such powerful, vivid, uber-consumable content is already highly exploitable and monetizable in itself (and it has been largely monetized throughout the years), but what is the case when it comes down to monetizing the actual game?

Pay-to-Play Fantasy Sports: The Global (?) Rise of Daily Fantasy Sports

Wikipedia mentions that FanDuel was founded in 2009, which makes it the first Daily Fantasy Sports (DFS) operator in the US, with DraftKings following up soon, in 2012.
The brains behind these innovative DFS companies came up with the perfect way to exploit the special market circumstances in the States back then: the absence and illegality of betting (beyond Vegas), the massive popularity of fantasy sports, and their exemption from any legal restrictions applying to betting activity, as a game of skill.

    Taking into consideration the power of the internet and mobile-first era connecting everyone with everything instantly, they realized that they needed to modernize fantasy sports and turn them into the highly-marketable, fast, attractive, and easy-to-play product that Daily Fantasy Sports became. By adding the “pay-to-play & win guaranteed cash” incentive, while removing the restrictive time-consuming factor of the season-long format, they introduced Paid Fantasy Contests for all, and for every day of the Gameweek!
    That’s how a new star industry was born and became super successful - until the first doubts and issues surfaced back in 2015; a setback that actually led to the complete transformation of the American igaming market: the legalization and birth of the US betting industry.

    But before that, the engaging DFS format and its profitability made an impact across the pond and within the traditional Fantasy Football sector in the UK and Europe.
    Innovative companies and entrepreneurs were inspired by the DFS boom and were certain of the format’s success in Europe - since actual betting had been legal and a part of everyday entertainment for (literally) ages, and fantasy football has been a passion - especially among the superfans of the English Premier League, Spanish La Liga, and Italian Serie A.
    Many DFS-like companies emerged between 2013-2017, but very few made it past that timeframe. It became apparent that albeit DFS contests were liked by many, and most “traditional” fantasy managers would embrace the concept - without giving up their favorite season-long game and its strategy element - daily fantasy sports were a new product.
    It was largely unknown to Europeans, who were familiar mostly with classic betting and mega operators like William Hill, Bet365, and 888, that offered a plethora of betting markets, odds, and options such as the cashout.
    In the end, it took almost a decade for sports betting operators to realize not only their own role and responsibility in the success of a daily fantasy sports offering, but the product’s necessity in their customer acquisition - retention cycle and ROI.

    It became clear that the unique case of the United States betting industry - or lack thereof until 2018 and the PASPA repeal - was the right foundation and catalyst for the successful establishment of daily fantasy sports. And that’s what paved the way for the introduction of sports betting in the country, as well.

    Fantasy Sports & Betting in the 2020s

    Back to the present, gradual state-by-state legalization and regulation of betting has America reliving the “gold rush” times, making it the land of opportunity all over again for the residents and profiteers of the global iGaming industry. Renowned sports betting software providers are either battling their place into casinos’ and online operators’ portfolios, or getting acquired by larger industry corporations claiming a piece of the pie.

    In the meantime, DFS giants have been thriving, expanding their offerings to sportsbook markets as well, while their success has made space for new differentiated fantasy operators; ones that cleverly offer hybrid DFS formats across all legal and “grey” areas between betting and fantasy sports legislation per state.

    In Europe, sports betting regulation becomes more strict every year throughout countries, entering the realm of Marketing activity, even reaching as far as forbidding online advertising completely. Fantasy sports offerings are inherently perfect to bridge the gap between operators and audience reach through original sports content, gaming and fan engagement - which are excellent cross-selling tools.

    Inventing the Fantasy Sportsbook

    The FSI Team foresaw this course of events and started working on the R&D of an innovative fantasy sports and betting fusion, an original Fantasy Sportsbook, the prototype of which was premiered to our industry in 2019, at ICE London.
    Through continuous updates and valuable client feedback, this Fantasy Sportsbook evolved to the original Fixed-Odds-Fantasy Suite that currently features three innovative fantasy sports betting markets:

    Sportsbook Manager: The first Fantasy Team-based Betting Market ever!

    Performance Props: The Next-Gen Under/Over Performance Betting!

    Man2Man: The DFS Showdown & Fan Engagement Revolution in Sportsbook!

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