Monday, December 16, 2019
Books: "Billion Dollar Fantasy" On The Battle Between FanDuel & DraftKings
Billion Dollar Fantasy: The High-Stakes Game Between FanDuel and DraftKings That Upended Sports in America
By Albert Chen
Houghton Mifflin Harcourt; hardcover; $27.00
Fantasy sports and gambling has exploded in the United States the last few years, to the point where it is legal in many states.
Betting lines are openly talked about on sports channels, something unheard of not too long ago. This is all due to two companies, whose fierce competition gave fire to a burgeoning industry.
The battle between FanDuel and DraftKings, backed by gushing venture capital money, unleashed $750 million worth of marketing and advertising in 2015 as they sought supremacy in an exploding fantasy sports and gambling market.
This is the first intensely researched account of the meteoric rise and the fierce rivalry between the companies that were hatched under the unlikeliest circumstances. One was born out of a university in Scotland, founded by a group of Brits who didn't follow sports. The other was created in a small townhouse in Boston, hatched by three nerds who had never before started a company.
They became billion-dollar companies overnight, and then, just as suddenly, found themselves as part of a national scandal and the target of FBI and Department of Justice investigations, and staring at destruction.
Incredibly, these companies came back, and they led the way to a historic moment in American sports, when a Supreme Court ruling in 2018 allowed for the legalization of sports betting in states across America.
"There are 60 million fantasy sports players in America, according to the Fantasy Sports Trade Association," Chen said. "I've been one since I was 11 or 12. I grew up in a small town in Nebraska. This was the 1990s, and my cousin, who'd just moved from Taiwan to live with my family, picked up a book on fantasy sports at the local library, and decided he was going to start a fantasy football league. Every week he took the stats from the local newspaper - remember, no internet - and tallied the numbers. A true labor of love. He didn't speak much English, and we bonded over these homemade games that made following sports a lot more interesting. When I began research for this book I found that there were a lot of people around this time doing the same thing, in basements and dorm rooms across the country. Today, I'm in at least four fantasy leagues a year, including one I've been in with friends from my high school for nearly 20 years - the League of Extraordinary Gentlemen, it's called - and I've no doubt I would have lost touch with many of these lifelong friends long ago if not for this annual tradition."
This is a deep dive into the history of gambling and fantasy sports in America, featuring additional interviews with industry experts and figures, from famous bookmakers in Las Vegas to the first entrepreneurs in the fantasy games space, including Nigel Eccles and Lesley Eccles of FanDuel, and Jason Robins of DraftKings.
Nigel Eccles, the former CEO and Co-Founder of FanDuel, was born and raised in Northern Ireland, a former McKinsey consultant who had modest goals of launching a startup out of Edinburgh. He became a star in the UK tech world, landing on the Independent's Rich List of the wealthiest people from Ireland, not far behind U2, but after his company and his rival, DraftKings, were deemed illegal gambling operations, he found himself at the center of an FBI investigation. Nigel also describes how he sometimes felt like an "imposter" running a fantasy sports company, given his background. He tells the story of how he had an important epiphany when, during an interview with CNBC, he could not name an NFL player for a single fantasy football tip, one moment among money that left him asking, "How did I get here?"
Lesley Eccles is the former marketing director and co-founder of FanDuel, and she tells for the first time what it was like to be tasked with leading a $250 million marketing spend, and running it with a staff of, as she says, "one and a half." Lesley, a mother of three in Scotland, was running a $250 million marketing spend for fantasy football season, making this possibly the unlikeliest story of all. She was the most influential figure at the company, behind the scenes, and was key in its early growth. In an intense board meeting in Edinburgh, she stood up to the investors during the ever of the 2014 NFL season and demanded that they spend $43 million on marketing because Draft Kings was coming. Lesley is very open about what it was like to be a woman in this world and the challenges of being married to the CEO.
Jason Robins, the CEO of DraftKings, first came to FanDuel in 2009, and then three years later, DraftKings arrived on the scene, and with their approach of aggressively raising money and burning through it for advertising, blew up the industry. It's an approach that some in the industry deemed so insane that they began calling the company "the suicide bombers." The company was launched by coworkers in Boston, out of the spare room of a townhouse of one of the founders. The story of DraftKings' rocky start is told for the first time: how Jason, a sports nerd who as a teenager played in over 100 different fantasy leagues at once, took the CEO title from his longtime friend and coworker, and how in the process, the company was nearly torn apart. A target of criticism throughout the industry for how he ran the company, Jason explains in detail his thinking in why raising hundreds of millions of dollars in order to catch up to FanDuel was the only choice he had.
If you see the theme of advertising as important to his country, you're not wrong, and that is what caught Chen's eye to this new variation of fantasy sports.
"It was the ads, of course," Chen said. "I watch a lot of football, and I kept seeing these commercials, and, like everyone else, I thought, How is this not gambling? This was the fall of 2014, before the big 2015 carpet bombing, and even then FanDuel and DraftKings commercials seemed to be airing on a loop. I was annoyed by the ads - and yet I was completely pulled in by them. I started playing at one of the sites, out of curiosity, and immediately saw the appeal. I pitched an idea to the editors of Sports Illustrated: a story on the rise of this peculiar industry that sold sports fans the promise of winning daily, a game that seemed tailor made for the dopamine-addicted digital age. I got on a plane to Las Vegas, to cover FanDuel's Fantasy Football World Championships. I stepped inside a casino ballroom full of drunken sports fans brought together on an NFL Sunday - I called my wife from there and my first words were, 'This is your worst nightmare' - and it was there where I met Nigel Eccles, the CEO of FanDuel, and Lesley Eccles, the woman, it turned out, behind the ads.
"A story ran in SI - the first feature story in a mainstream media outlet to shine a light on this industry. I moved on but watched in astonishment as, over the next few months in 2015, everything about the industry got bigger: bigger money raised, bigger advertising, bigger prizes. Then, at the height of it all, the scandal erupted, and I'm at home watching these companies become punchlines on The Daily Show and John Oliver. The rise and fall was stunning to watch."