Draft Kings Buys Draft Street

[Greg Ambrosius]

This is kind of wild news as the Daily Fantasy Sports marketplace now has two major players in the space. It's amazing how quickly this area of the marketplace grew and how quickly the big boys took over and/or merged. What are your thoughts on this latest news?

http://www.usatoday.com/story/sports/fa ... /12640959/

The second- and third-largest daily fantasy sports sites are joining forces. Boston-based DraftKings, Inc. will announce its acquisition of DraftStreet and merge the two companies Tuesday morning.

The takeover will increase DraftKings' customer base by more than 50%, according to CEO Jason Robins, who says the move puts the company on par with the industry's largest site, Fan Duel. Financial terms were undisclosed.

"It's going to be essentially an unnoticeable difference either way," Robins told USA TODAY Sports. "I think the true impact in the long run is from a product and experience perspective is having all those things that made two separate sites -- DraftStreet and DraftKings -- be able to thrive with a loyal user base."

Fantasy sports players who have accounts on DraftStreet will be able to log into their accounts and either cash out their winnings or move them over to DraftKings. Robins said a 100% transfer bonus should help make the transition a bit easier.

Still, the loss of the No. 3 daily sports site will definitely have an impact among fantasy players.

"It's really hard for me to say if it's good or bad. What I can say is, it's reality," said Michael Rathburn, a daily fantasy sports analyst for Rotowire.com. "It's not great for the players because DraftStreet is a different product and there was a lot of volume on that site."

There will be no immediate changes to the suite of DraftKings offerings, but a major focus in the acquisition was incorporating some of the more popular elements on DraftStreet into the games on DraftKings.com.

"In the end what players should see is a combination of both sites," Robins said. "It's not going to happen overnight, but the goal is not to just bring the users over, it's to bring all the elements of DraftStreet."

Another benefit, he said, is that it will allow the company to offer "definitively larger" prize pools than Fan Duel does. For example, DraftKings will be hosting the largest daily fantasy league in history, the $3.3 million Guaranteed Fantasy Baseball Championship, this August.

Even with the merger, Robins said there will still be room for consolidation and innovation within the daily fantasy industry.

"There's always an opportunity to do something new and cool with the game inside the game," he said. "The companies that continue to innovate and continue to put out great new stuff are going to continue to get attention regardless of whether there's one or two big players now."

[Outlaw]

When a major VC player like Dillar pulls the plug after only a year, one has to wonder why, although his model is to dump losers pretty quick. This deal is a asset deal probably for nickels on the dollar. Word on the street is DS was underwater/losing big time and that DK may also be too. DK also actively trying to raise 35M in capital now. They have already burned through initial VC of around 35M, 24M of it just since last Nov.

This part of the merger speaks volumes.

"As part of this launch, we will be offering any new DK players a 100% deposit bonus on transferred funds, and we will also be offering that bonus again when you make your first deposit on DK. For players who are already on DK, we will be offering you a 25% bonus on transferred funds if you have a DraftStreet account. If you don’t have a DraftStreet account, we will still make the 25% bonus available to you whenever you make your next deposit. Be on the lookout for an email with instructions on how to redeem it."

Lots of talk about vouchers, credits etc... being offered to players during the switch....

I was just told my $10,000 a year in referral fees that I have earned the last 3 years is kaput and now these joker want my business. Really? this is what Mazz posted earlier:
1. All affiliates and recruits will keep their recruits as they create new accounts on DraftKings.
The Amway and May Kay business Model it seems.

[Greg Ambrosius]

Not a lot new out there on this subject, but here's one story from Forbes:

http://www.forbes.com/sites/marcedelman ... l-biggest/

[Outlaw]

Lots of speculation Yahoo Has its eyes on DraftKings now. SI jumping in Fantasy world is interesting, but they will not offer their new games in 8 States as of now. Will be interesting the next year in Fantasy.

[Yah Mule]

This article was posted on another board and I thought some people here might find it useful. Many daily players say they disregard streaking players, but research suggests they might be making a mistake. Based on a sample size consisting of two million MLB at-bats from 2000 to 2011, researchers claim hot streaks can be predictive of future performance. Maybe a guy's last 20 AB's or last two mound appearances should be weighted slightly more when assessing lineup construction.

http://www.washingtonpost.com/sports/na ... story.html

[ToddZ]

This article was posted on another board and I thought some people here might find it useful. Many daily players say they disregard streaking players, but research suggests they might be making a mistake. Based on a sample size consisting of two million MLB at-bats from 2000 to 2011, researchers claim hot streaks can be predictive of future performance. Maybe a guy's last 20 AB's or last two mound appearances should be weighted slightly more when assessing lineup construction.

http://www.washingtonpost.com/sports/na ... story.html

Saw this earlier -- very interesting. What's left out is exactly how they define hot. Based on that it could get even more interesting.

[Liquidhippo]

I wanted to give both Draft Street and Draft Kings the opportunity to answer questions privately before criticizing either in public forums. After their responses, or lack thereof, I have to say that the takeover, the way it was presented, and the conspicuous lack of information about how the finalists for Draft Street's Million Dollar contest were compensated(if at all) is disappointing. What happened to the finalists? It's being treated like it's classified, top secret information. Why? Draft Street would not respond. Draft Kings assured me that the VIP Manager had contacted all of the finalists, well of course they did. The WCOFF also had their 'VIP Manager' contact me before they stiffed me for over 25K. These types of things do not facilitate trust in a volatile fantasy sports landscape that has seen a number of contest operators fail to meet their financial obligations to their clientele. The spin that this development is 'great news for Draft Street players' leads me to believe that the CEO of Draft Street doesn't think much of the collective IQ of its customer base.

[ToddZ]

Those holding Draft Street tickets were offered the cash equivalent of their ticket or a ticket into an analogous Draft Kings contest.

The reason for the choice was the difference in formats. The DK owners did not want to force DS players into competing in a format they may not like (there are significant differences between the sites lineup and pricing). It's my understanding some took the cash and some exchanged their DS ticket for a DK one.

[Cocktails and Dreams]

I wanted to give both Draft Street and Draft Kings the opportunity to answer questions privately before criticizing either in public forums. After their responses, or lack thereof, I have to say that the takeover, the way it was presented, and the conspicuous lack of information about how the finalists for Draft Street's Million Dollar contest were compensated(if at all) is disappointing. What happened to the finalists? It's being treated like it's classified, top secret information. Why? Draft Street would not respond. Draft Kings assured me that the VIP Manager had contacted all of the finalists, well of course they did. The WCOFF also had their 'VIP Manager' contact me before they stiffed me for over 25K. These types of things do not facilitate trust in a volatile fantasy sports landscape that has seen a number of contest operators fail to meet their financial obligations to their clientele. The spin that this development is 'great news for Draft Street players' leads me to believe that the CEO of Draft Street doesn't think much of the collective IQ of its customer base.

I would be very careful in comparing Draftkings buying out draftsreet to WCOFF not getting bought out by anyone and screwing people. It is ludicrous to do so. You are smarter than that.

[Greg Ambrosius]

DraftKings is at it again with another purchase of a rival. It's really going to be two DFS games soon:

By Eric Fisher, SportsBusiness Journal
DraftKings Inc., a Boston-based daily fantasy sports company, has purchased local rival outfit StarStreet, the company’s second acquisition this summer. This extends a period of marked growth for DraftKings, as the StarStreet buy follows a recent purchase of N.Y.-based DraftStreet. Terms of the deal were not disclosed. DraftKings also recently closed on a $41M Series C round of venture capital funding designed to support the company’s ongoing growth phase. N.Y.-based investment bank The Raine Group led the funding round.

[ToddZ]

DraftKings is at it again with another purchase of a rival. It's really going to be two DFS games soon:

Don't forget USA Today has jumped in - I agree there will be more consolidation but it still looks like McDonalds, Burger King and Wendy's to me and not just Coke and Pepsi.

Why are all my analogies food-related?

[DOUGHBOYS]

Also, of no relevance at all to this conversation, Pepsi owns Frito-Lay.
Damn your food analogies, Todd!!!

[Liquidhippo]

I wanted to give both Draft Street and Draft Kings the opportunity to answer questions privately before criticizing either in public forums. After their responses, or lack thereof, I have to say that the takeover, the way it was presented, and the conspicuous lack of information about how the finalists for Draft Street's Million Dollar contest were compensated(if at all) is disappointing. What happened to the finalists? It's being treated like it's classified, top secret information. Why? Draft Street would not respond. Draft Kings assured me that the VIP Manager had contacted all of the finalists, well of course they did. The WCOFF also had their 'VIP Manager' contact me before they stiffed me for over 25K. These types of things do not facilitate trust in a volatile fantasy sports landscape that has seen a number of contest operators fail to meet their financial obligations to their clientele. The spin that this development is 'great news for Draft Street players' leads me to believe that the CEO of Draft Street doesn't think much of the collective IQ of its customer base.

I would be very careful in comparing Draftkings buying out draftsreet to WCOFF not getting bought out by anyone and screwing people. It is ludicrous to do so. You are smarter than that.

I take exception to this Chad. Greg asked for our thoughts. I gave them. Being disappointed at not having some basic questions answered about the takeover is ludicrous? In this industry, trust is not given freely. It is earned. If you think that is ludicrous, so be it. I think my comments were rather conservative. I didn't accuse them of anything. I only stated facts. I gave them ample time to respond to questions and they either didn't respond or refused answer some basic questions. That's disappointing. Your response seems to read into what I said. Draft Street and Draft Kings, their customer service(or lack thereof), what they communicated to me and what they avoided, in some ways reminded me of my experience with WCOFF(and other fantasy contests/companies) BEFORE they stiffed me. That is a fact. Does that mean they stiffed me or will stiff others? No, but it doesn't facilitate building trust in this industry in my opinion. I'm pleased to hear Todd's response. I find it odd that Draft Kings or Draft Street couldn't have taken 30 seconds to say as much.

[Cocktails and Dreams]

I wanted to give both Draft Street and Draft Kings the opportunity to answer questions privately before criticizing either in public forums. After their responses, or lack thereof, I have to say that the takeover, the way it was presented, and the conspicuous lack of information about how the finalists for Draft Street's Million Dollar contest were compensated(if at all) is disappointing. What happened to the finalists? It's being treated like it's classified, top secret information. Why? Draft Street would not respond. Draft Kings assured me that the VIP Manager had contacted all of the finalists, well of course they did. The WCOFF also had their 'VIP Manager' contact me before they stiffed me for over 25K. These types of things do not facilitate trust in a volatile fantasy sports landscape that has seen a number of contest operators fail to meet their financial obligations to their clientele. The spin that this development is 'great news for Draft Street players' leads me to believe that the CEO of Draft Street doesn't think much of the collective IQ of its customer base.

I would be very careful in comparing Draftkings buying out draftsreet to WCOFF not getting bought out by anyone and screwing people. It is ludicrous to do so. You are smarter than that.

I take exception to this Chad. Greg asked for our thoughts. I gave them. Being disappointed at not having some basic questions answered about the takeover is ludicrous? In this industry, trust is not given freely. It is earned. If you think that is ludicrous, so be it. I think my comments were rather conservative. I didn't accuse them of anything. I only stated facts. I gave them ample time to respond to questions and they either didn't respond or refused answer some basic questions. That's disappointing. Your response seems to read into what I said. Draft Street and Draft Kings, their customer service(or lack thereof), what they communicated to me and what they avoided, in some ways reminded me of my experience with WCOFF(and other fantasy contests/companies) BEFORE they stiffed me. That is a fact. Does that mean they stiffed me or will stiff others? No, but it doesn't facilitate building trust in this industry in my opinion. I'm pleased to hear Todd's response. I find it odd that Draft Kings or Draft Street couldn't have taken 30 seconds to say as much.

That is your right. And I take exception to the comparison, since I was significantly impacted by both situations. One circumstance was a company lying to customers, making all sorts of false claims, and outright stiffing people. In my case, over a quarter million dollars. The other circumstance is a buy out. One company buying out another and fully compensating the players dollar for dollar and in most cases much more. Having been heavily involved in both events, I fail to ever remotely see any comparison. And you also suggest that Mr. Aguilar, the draftkings VIP rep, is a liar. The words, "ofcourse they did" suggest that these talks did not happen, or that those players were lied to. Do you know him? Comparing him to Dustin Ashby is not right, unless you do. You claim you stated facts. I fail to see any facts. These are the facts. Draftkings took care of everybody. WCOFF screwed everybody.

[Liquidhippo]

That is your right. And I take exception to the comparison, since I was significantly impacted by both situations. One circumstance was a company lying to customers, making all sorts of false claims, and outright stiffing people. In my case, over a quarter million dollars. The other circumstance is a buy out. One company buying out another and fully compensating the players dollar for dollar and in most cases much more. Having been heavily involved in both events, I fail to ever remotely see any comparison. And you also suggest that Mr. Aguilar, the draftkings VIP rep, is a liar. The words, "ofcourse they did" suggest that these talks did not happen, or that those players were lied to. Do you know him? Comparing him to Dustin Ashby is not right, unless you do. You claim you stated facts. I fail to see any facts. These are the facts. Draftkings took care of everybody. WCOFF screwed everybody.

How you can get all that and add all that from what I posted puzzles me. Much is convoluted. I'm not sure I should clog up these boards with the lengthy response that would be required to straighten each one out. I will address a couple.


you wrote: One circumstance was a company lying to customers, making all sorts of false claims, and outright stiffing people.

Exactly, and I would think that you would understand someone proceeding with caution with other contests and not find it strange when someone expects a certain level of communication/customer service before trust is established. But, it sounds like you take exception to that.

you wrote: The other circumstance is a buy out. One company buying out another and fully compensating the players dollar for dollar and in most cases much more.

Exactly, and this was 'top secret information' that they refused to give me(at the time of the original post). I suppose that is their right. But why not just tell me that? Why give me the run around just like other contests. That disappointed me. I guess you take exception to that.

you wrote: And you also suggest that Mr. Aguilar, the draftkings VIP rep, is a liar. The words, "ofcourse they did" suggest that these talks did not happen, or that those players were lied to.

No, I don't know Mr. Aguilar and I in no way shape or form suggested that he was a liar, nor did I suggest he was honest, I didn't even suggest that Mr. Aguilar existed, nor had I heard his name before you brought him into the conversation. I wanted to know whether the patrons affected were rightly compensated, instead of answering the question, it was dodged. Instead of assuring me that they were justly compensated, which would have been pretty easy to do, they instead told me that they were contacted by the VIP rep. That told me nothing. It didn't tell me they were compensated. It didn't tell me they weren't compensated. It told me they were avoiding the question, and they continued to avoid that question in numerous follow-up emails. At best, it was poor customer service. At worst, it was something worse. I had no way of knowing. They were content to leave me guessing. But I guess I am out of line sharing that experience, even at Greg's prompting.

you wrote: These are the facts. Draftkings took care of everybody. WCOFF screwed everybody.

Great. Glad to hear it. If Draft Kings or Draft Street had simply taken 30 seconds to state this, I wouldn't have made the post. Since I had to find this out from patrons, I still remain disappointed in their communication and customer service.

[Cocktails and Dreams]

Yeah it didn't seem like you knew him, or even knew of him. And it didn't seem like you knew much about Draftkings and their top notch customer service. And that is why I defended them. Comparing them to WCOFF is one of the dumbest things I have ever heard in my life.

[Liquidhippo]

Yeah it didn't seem like you knew him, or even knew of him. And it didn't seem like you knew much about Draftkings and their top notch customer service. And that is why I defended them. Comparing them to WCOFF is one of the dumbest things I have ever heard in my life.

Your subtle twisting of what I posted and dragging me into defending things I didn't actually say has gotten old. I never equated the two, which is what you keep implying. My entire focus was disappointment with their communiques and customer service.

[Hells Satans]

Interesting to see the play this week on FD and DK for football. The impression I got is they both took an absolute bath on their guaranteed, big $$$ fee games (DK worse than FD; they were around 50% full on their big events an hour before kickoff). Even FD only filled 79 of the 108 seats they need to break even in the $1k entry into their DFFC. They didn't even come close to filling up the $200 DFFC qualifer or their big $1.2m "monster" contest either. They were both pretty big money losers for them. I have them losing $300k just on the Monster contest alone.

Have they bitten off more than they can chew on these guaranteed prizes in the higher entry fee games? I notice this week that FD is only offering $25 and $10 qualifiers (which I think sold out last week).