Both FanDuel and DraftKings have received significant investments from high profile backers this year, much of which has been spent on aggressive advertising campaigns for the NFL season.
DraftKings, however, has taken its marketing efforts to the next level, even outspending companies like Geico, Warner Bros and AT&T on advertisements in recent weeks. Apart from going head-to-head in paid media, DraftKings and FanDuel have been playing a game of one upmanship, each offering massive Guarantees, one bigger than the next.
In July, DraftKings announced its $3 million guaranteed Fantasy Baseball World Championships. Not to be outdone, FanDuel hit back with a $4 million MLB championship of its own. DraftKings responded by adding $1 million more to its event to match the FanDuel contest.
Would a merger make sense?
With so much cash being spent by the two rivals to gain market share, some believe that a FanDuel/DraftKings merger would make sense. In fact, the St. Louis Post recently reported that DraftKings CEO Jason Robins would be open to the idea of merging the two DFS sites. At the moment, however, it’s unclear if FanDuel would be interested in such a move.
“In the case of a merger with FanDuel, even if we were really in favor of it, they’d need to want to do it too,” Robins said.
Also on the table for the two companies is the possibility of going public. “I ask everyone I meet with, ‘should we go public? Should we raise another private round? Should we buckle down and focus on profitability?’” Robins said.
FanDuel seems to be following the same tack, taking a wait-and-see approach and making decisions after this NFL season. “We would in January go to the bankers and say ‘this is how football has gone, this is what we think 2016 looks like, when does it make sense [to go public]?’” he said.
For now, the rivalry remains in full swing. For NFL Week 1, FanDuel is offering a $5 million Guarantee, and will award $12 million in total prizes for the week. DraftKings responded in kind with a $10 million Guarantee and is slated to pay out $25 million in prizes of its own.
“Right now, you’re seeing an unbelievably explosive period of growth,” Robins said. “No one can really predict where this is heading. It’s exciting.”