The company was originally launched in 2012 as a DFS provider, competing principally with the New York-based FanDuel. In May 2018, amid the widening legalization of sports betting in the United States, DraftKings began to expand into online and retail sportsbooks to leverage its brand awareness and customer base.[3]
DraftKings was established in 2012 by Jason Robins, Matthew Kalish, and Paul Liberman, former Vistaprint employees.[5] The company initially operated out of Liberman's house.[5] The company's first product was a one-on-one baseball competition, launched to coincide with Major League Baseball's opening day in 2012.[5]
In April 2013, Major League Baseball invested in DraftKings, becoming the first US professional sports league to invest in daily fantasy sports. The investment was not disclosed at the time.[6]
In February 2014, it was reported that the company awarded $50million in prizes in 2013 to players in weekly fantasy football, daily fantasy baseball, daily fantasy basketball and daily fantasy hockey. The company also reported 50,000 active daily users and as many as one million registered players.[1]
In July 2014, it announced the acquisition of rival DraftStreet, owned at the time by IAC, the third largest player in the fantasy sports space.[7] The acquisition reportedly increased DraftKings' user base by 50%.[8] The company announced it would keep the DraftStreet NY office open and retain some employees.[7]
In August 2014, the company announced $41million in funding from a variety of investors, including The Raine Group, as well as existing investors Redpoint Ventures, GGV Capital, and Accomplice.[9] The company also announced that it was acquiring the assets of Somerville, Massachusetts, competitor StarStreet.[7]
In November 2014, DraftKings reached a two-year deal to become the official daily fantasy sports service of the National Hockey League. The deal included sponsorships of video features and other content across the NHL's digital outlets, co-branded free games with fan-oriented prizes, and in-venue ad placements during marquee NHL events. Yahoo! Sports remained the league's official season-length fantasy sports provider.[10][11]
In April 2015, DraftKings reached a similar deal with Major League Baseball.[12] The agreement allowed DraftKings to offer co-branded MLB daily fantasy games and extend its relationships with individual MLB clubs to offer in-stadium fantasy-related experiences.[12] The company also announced it had received $304million in users' entry fees in 2014.[12]
In July 2015, DraftKings entered into a three-year advertising deal with ESPN Inc. valued at $250million.[13] This deal included "integration" of the service within ESPN's television and digital content, and having exclusivity in advertising DFS services on its networks beginning in January 2016.[14]
In August 2015, DraftKings announced that it had been granted a license by the Gambling Commission in the United Kingdom to operate pool wagering services and that it planned to open an office in London. The company also hired Jeffrey Haas, a veteran of the online poker industry, to serve as Chief International Officer to lead the company's international expansion.[17] DraftKings officially launched in the UK on February 5, 2016, with daily fantasy soccer. As part of the launch, DraftKings enhanced its handling of soccer on the platform to appeal to the local audience.[18] The following year, DraftKings was subsequently awarded a controlled skill games license in Malta, which would allow the service to expand into any European Union country that allows gambling services to operate under licensing from another EU country, such as Germany.[19]
On October 5, 2015, an article in The New York Times indicated that an employee at DraftKings admitted to inadvertently releasing data before the start of week three's NFL football games. That same employee had won $350,000 on rival fantasy site FanDuel the same week. An internal review concluded the employee obtained the data after lineups were locked and couldn't have used that data for an unfair advantage.[20] Both DraftKings and FanDuel released statements saying that "Nothing is more important... than the integrity of the games we offer to our customers," and they would work with the entire fantasy sports industry "so that fans everywhere can continue to enjoy and trust the games they love."[21] The following day, New York Attorney GeneralEric Schneiderman opened an inquiry into DraftKings and FanDuel, asking each site for a range of internal data and details on how they prevent fraud.[22] ESPN announced on October 6 that they would no longer be running segments sponsored by DraftKings, though paid DraftKings advertisements would continue.[22]
In February 2016, ESPN backed out of its advertising deal with DraftKings due to the legal uncertainties surrounding the service.[23][24]
On November 18, 2016, DraftKings and FanDuel announced their intent to merge. The combined company would serve over five million users.[27] On June 19, 2017, the Federal Trade Commission (FTC) announced that it would seek a preliminary injunction to block the proposed merger. The FTC felt that the proposed transaction would give the combined company 90% of the U.S. DFS market, which is considered to be a monopoly position.[28] On July 13, 2017, the merger was officially called off due to the threat of litigation from the FTC.[29]
In September 2017, DraftKings and FanDuel each paid $1.3million to settle with the Massachusetts Attorney General's office over allegations of unfair and deceptive practices by the companies prior to 2016.[30]
2018–present: expansion into sports betting
In May 2018, the Professional and Amateur Sports Protection Act of 1992 was declared unconstitutional by the Supreme Court of the United States, allowing states outside of Nevada to legalize sports betting.[31] In August 2018, DraftKings launched its first legal online sportsbook in New Jersey.[32] Since launching in New Jersey, DraftKings has opened sports betting operations in New York, West Virginia, Indiana, Iowa, New Hampshire, Massachusetts and Mississippi.[33]
In April 2020, DraftKings completed a reverse merger valued at $3.3billion that made it a publicly traded company. The merger involved Diamond Eagle Acquisition Corp., a special-purpose acquisition company that went public in May 2019, as well as SBTech Global Ltd., a Europe-based company providing technology solutions for sports betting businesses.[citation needed] The combined company keeps both DraftKings' name and its executive management. On April 24, 2020, the company's shares started trading on the Nasdaq stock exchange under the ticker symbol "DKNG".[34][35][36]Hindenburg Research later published a report alleging that SBTech, which accounted for around 25% of DraftKing's revenue at the SPAC consummation, has ties to organized crime in Bulgaria and illegal gambling around the world.[37]
In September 2020, retired NBA player Michael Jordan became an investor and board advisor at DraftKings.[38][39][40] In March 2021, DraftKings acquired the Vegas Stats & Information Network (VSiN), a Las Vegas-based radio network and digital media platform oriented towards sports betting news and analysis, from the family of sportscaster Brent Musburger.[41] In December 2021, DraftKings was sued by Colossus Bets for patent infringement. Colossus claimed DraftKings infringed seven patents related to a cash-out feature in their sports betting and gaming products.[42]
Despite setting record monthly highs for revenue and handle for Massachusetts sports betting in October 2023, DraftKings requested 178 bets to be voided with the Massachusetts Gaming Commission. The bets worth $4,182 account for a total liability of $575,436 from an NBA prop market error.[43]
On September 11, 2023, DraftKings issued an apology for a controversial promotion that used the 22nd anniversary of the September 11, 2001, terror attacks to encourage betting on games involving New York-based teams. The promotion, which was criticized for exploiting a national tragedy for business, was quickly removed following public backlash.[44]
In 2021, DraftKings agreed to pay at least $50 million over a three-year period to distribute a sports and pop-culture podcast hosted by Dan Le Batard. The agreement marks the first major licensing deal struck by Meadowlark Media, founded by Le Batard. The podcast averages around 10 to 12 million downloads monthly.[45][46][47] As of July 2021, DraftKings reached a market capitalization of $20.64 billion.[48]
In May 2022, DraftKings acquired Golden Nugget Online Gaming.[49] In February 2024, the company acquired lottery courier app Jackpocket for $750 million.[50] In July 2024, DraftKings sold VSiN back to the Musburger family.[51]
In September 2024, the company was fined $200,000 by the Securities and Exchange Commission (SEC) for violating Regulation Fair Disclosure when the company's PR team shared material, non-public information about revenue growth on CEO Jason Robins's personal LinkedIn and X (formerly Twitter) accounts before its official earnings release.[52]
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A fantasy sport is a game, often played using the Internet, where participants assemble imaginary or virtual teams composed of proxies of real players of a professional sport. These teams compete based on the statistical performance of those players in actual games. This performance is converted into points that are compiled and totaled according to a roster selected by each fantasy team's manager. These point systems can be simple enough to be manually calculated by a "league commissioner" who coordinates and manages the overall league, or points can be compiled and calculated using computers tracking actual results of the professional sport. In fantasy sports, as in real sports, team owners draft, trade, and cut (drop) players.
Fantasy football is a game in which the participants serve as owners and general managers of virtual gridiron football teams. The competitors select their rosters by participating in a draft in which all relevant National Football League (NFL) players are available. Fantasy points are awarded in weekly matchups based on the actual performances of football players in real-world competition. The game typically involves the NFL, but can also involve other leagues, such as the Canadian Football League or NCAA.
Audacy, Inc. is an American broadcasting company based in Philadelphia, Pennsylvania. Founded in 1968 as Entercom Communications Corp., it is the second largest radio company in the United States, owning over 220 radio stations across 47 media markets.
Penn Entertainment, Inc., formerly Penn National Gaming, is an American entertainment company and operator of integrated entertainment, sports content, and casino gambling. It operates 43 properties in 20 states, under brands including Hollywood Casino, Ameristar, and Boomtown. It also owns the Canadian digital media company Score Media and Gaming.
Evoke plc, formerly 888 Holdings Limited, is an international sports betting and gambling company. It owns brands such as 888casino, 888poker, 888sport, Mr Green, and William Hill. Business operations are led from its headquarters in London, alongside satellite offices in Bucharest, Ceuta, Gibraltar, Leeds, Malta, Sofia, and Tel Aviv. It is listed on the London Stock Exchange.
FanDuel TV is an American sports betting-oriented digital cable and satellite television network owned by FanDuel Group, the U.S. subsidiary of Irish bookmaker Flutter Entertainment. It primarily airs live coverage of U.S. and international horse racing as well as studio shows focused on mainstream sports.
Yahoo! Sports is a sports news website launched by Yahoo! on December 8, 1997. It receives a majority of its information from Stats Perform. It employs numerous writers, and has team pages for teams in almost every North American major sport. Before the launch of Yahoo Sports, certain elements of the site were known as Yahoo! Scoreboard.
Daily fantasy sports (DFS) are a subset of fantasy sport games. As with traditional fantasy sports games, players compete against others by building a team of professional athletes from a particular league or competition while remaining under a salary cap, and earn points based on the actual statistical performance of the players in real-world competitions. Daily fantasy sports are an accelerated variant of traditional fantasy sports that are conducted over short-term periods, such as a week or single day of competition, as opposed to those that are played across an entire season. Daily fantasy sports are typically structured in the form of paid competitions typically referred to as a "contest"; winners receive a share of a pre-determined pot funded by their entry fees. A portion of entry fee payments go to the provider as rake revenue.
FanDuel Group is an American gambling company that offers sportsbook, daily fantasy sports, horse racing, and online casino. The company operates sportsbooks in a number of states including New Jersey, Pennsylvania, Indiana and West Virginia, as well as an online horse race betting platform, and a daily fantasy sports service.
Fanatics, Inc. is a global digital sports platform that consists of several businesses, including licensed sports merchandise, trading cards and collectibles, sports betting and iGaming, special events, and live commerce. The company began as an American online retailer of licensed sportswear and merchandise, which operated the e-commerce businesses of major professional sports leagues and media brands, as well as hundreds of collegiate and professional team properties.
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Genius Sports is a sports data and technology company that provides data management, video streaming and integrity services to sports leagues, bookmakers and media companies.
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Monkey Knife Fight was a daily fantasy sports (DFS) platform that offers daily contests in a range of professional sports and eSports leagues. Users enter simple fantasy contests on its website and win money if they predict the outcome correctly. Contests are available for NFL, NBA, MLB NHL, Esports, Golf, Soccer, WNBA, and NASCAR events.
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SidePrize LLC, also known as Performance Predictions LLC, is an American daily fantasy sports (DFS) operator doing business as PrizePicks. The company is known for offering DFS contests, such as "pick 'em"-styled games for its users. Headquartered in Atlanta, PrizePicks has encountered contentious legal issues due to its distinction as a DFS operator, as opposed to a sportsbook.
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