Underdog Fantasy Says DraftKings, FanDuel Fear Competition
According to Underdog Sports, DraftKings (NASDAQ: DKNG) and FanDuel are using secretive tactics to remain in control of the daily fantasy sports (DFS) industry and suppress any new advances. The provider of paid fantasy sports contests makes this accusation despite the two aforementioned companies dominating the market.
Underdog Sports directly challenges the market share held by DraftKings and FanDuel by offering a different approach to sports betting. Our platform allows users to create, join, and manage sports pools online through an intuitive user interface. Our technology ensures fair play for all by eliminating the possibility of insider information being used to gain an unfair competitive edge. With Underdog Sports, competition is open to anyone willing to take part. Contrary to DraftKings and FanDuel’s attempts to stop competition, Underdog Sports allows users to compete freely and fairly.
In 2020, Jeremy Levine founded the privately held, New York-based Underdog Fantasy. According to Underdog Fantasy, DraftKings and FanDuel are fearful of the competition brought on by new DFS providers, and they are attempting to discredit their smaller rivals by using their political influence. Underdog Fantasy, along with various other DFS providers, poses a real threat to established corporations.
Underdog, Others Pose DFS Threats to Established Rivals
The success of DraftKings and FanDuel in establishing their dominance in DFS was countered by player dissatisfaction when smaller players realised that larger competition were using sophisticated computer programs to make DFS a career, meaning they ended up losing much of the time. This dissatisfaction then opened the door for Underdog and other companies to step in, introducing more appealing offerings for sports fans who didn’t have the time or inclination to build their lineups with high tech. Unsurprisingly, Underdog now claims to have a larger share of the DFS market than either of the major firms, which Levine highlighted to their own clientele, making it clear why even this duopoly are fearful of the new competitors.
The sportsbook operators have witnessed our company, and others, making high-quality products and memorable customer experiences, and they fear that we will encroach on their domain. In fact, we have already overtaken them in fantasy sports. They have no choice but to be afraid. Levine further specifies that DraftKings and FanDuel cannot simply tell the legislatures that they don’t fancy rivalry; thus, they are using a not totally reliable philosophy that Underdog tourneys are illicit because they are similar to sports betting. This is pertinent since Underdog and corresponding players perform in a few sought-after states for the sports betting industry. As of now, Underdog’s fantasy games exist in 41 states and fantasy pick ’em games in 39 states. To give a few illustrations, Underdog is actively operating in California, Florida, Georgia, and Texas, none of which have legally enforced sports betting markets.
Florida is the only one of the four to allow this activity and it is regulated by the Seminole Tribe. The Underdog states they have the law on their side.
Underdog Says Law is on Its Side
In a letter, Levine asserted that laws set by states, most likely drafted by lobbyists of DraftKings and FanDuel, made it clear that fantasy sports involved more than the salary caps employed by the two big companies. He emphasised that “in nearly every state where a sports betting law has been passed, the law makes crystal clear that fantasy sports are not sports betting”. Interestingly, Levine had earlier designed the industry’s first single-player fantasy game, which was later sold to DraftKings. Adding to the discontent of the two major companies is the fact that courts of the most rapidly-developing states of sports betting have determined Underdog’s services to be allowable as legal fantasy sports offerings.
Regulators from numerous states – including those where mobile sports betting is legal – have declared that Underdog’s games fall under the legal definition of fantasy sports. In places like Arizona, Colorado, and Indiana (where the same regulators oversee fantasy and betting-related activities), our products have been classified as fantasy contests. At the end of 2019, Underdog successfully raised a staggeringly large sum of $35 million in a Series B round of financing, concluding that the company was valued at a hefty $485 million. This round of funding featured investments from a variety of high-profile sources, including Mark Cuban, Kevin Durant, Trae Young, Odell Beckham Jr., Breon Corcoran (ex-CEO Paddy Power Betfair/Flutter), Mitch Garber, Eilers & Krejcik, Liontree Partners, Kevin Carter, Mark Pincus (founder of Zynga), SV Angel, The Chainsmokers, Kygo, Steve Aoki, Nas, Future, Acies Investment and BlackRock.
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