Yahoo! New Player in Fantasy Sports Market4 years ago
Yahoo has launched a daily fantasy sport service on Wednesday as a part of their strategy to expand their presence in the multi-billion fantasy sports industry.
For a long time, Yahoo has been entertaining fans around the world by allowing people to compete throughout the duration of the season but until this point, it was only for fun. Until Wednesday, Yahoo didn’t allow its users to win money in the games.
In their statement, Yahoo said that they are taking the game to the next level and giving their fans what they've always wanted. The company isn’t starting from a scratch while joining booming industry thanks to their existing user base. According to the company’s statement they already have tens of millions users signed up with their traditional fantasy sports.
Their daily sports fantasy service is also available through the mobile app and allows users to compete in groups or individually.
According to STATS, fantasy sports is one of the most popular online activities with more than 40 million users in the US and Canada. Sports gambling is legal only in four states but fantasy sports is considered legal in most states. In Arizona, Louisiana, Montana, Iowa and Washington fantasy sports is considered illegal due to local laws.
The Unlawful Internet Gambling Act classifies fantasy sports as a game of skill, which gave wings to the creation of numerous fantasy sports sites.
Two major websites in the industry, Fan Duel and Draftkings, are quickly growing their revenues and user bases. On Wednesday, when Yahoo launched its service, Fan Duel was quite surprised with the appearance of Yahoo’s product. According to the spokesman for the Fan Duel, the company was a bit taken aback because Yahoo’s daily fantasy platform looks a lot like their own.
Managing director for Eilers Research also noticed that Yahoo’s platform is not much different from its competitors’ platforms, saying that he is a little bit disappointed because of those similarities.
He also estimated that Yahoo has to invest around $100m in 2015 if they want to compete with Draftkings and Fan Duel.
As Yahoo’s advertising revenue has been in decline for the past few months, launch of the fantasy sports could be a right move to get the things moving in the right direction again. Even though it is definitely hard to compete with Fan Duel and Draftkings, fantasy sports will probably should have a positive impact on Yahoo’s revenues.
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