Walt Disney Invests $250 Million in DraftKings

DraftKings, currently no. 2 in the daily fantasy sports (DFS) market, is taking aim at grabbing a greater percentage of that burgeoning industry by securing an investment of $250 million from the Walt Disney Co. in exchange for a 20% stake in the company.

According to eGaming Review, DraftKings has captured 30% of the DFS marketplace, while FanDuel has more than double that of its main competitor with 65%. Both DFS companies stepped up marketing efforts recently as the MLB season got underway on April 5.

The particulars of the deal reportedly require DraftKings to spend $500 million over a three-year period in advertising at ESPN, a subsidiary of Disney. FanDuel also promotes itself on ESPN and will continue to do so, but DraftKings will be afforded premium placement of adverts at the sports network.

A new player in the DFS market will make an appearance later this year, as Amaya has announced plans to make an entrance. After acquiring PokerStars last year, Amaya recently expanded further by accepting its first sports wager.

Rumors are flying as to how Amaya will approach the legal DFS industry. A takeover of one of the DFS market giants is not out of the realm of possibilities.

The DFS industry may reach a value of $2.6 billion by 2020, according to an estimate by Eilers Research. Neither DraftKings nor FanDuel have turned a profit as of yet, as marketing spend continues to reach high levels for both.