By Gavin Dunne GameDay Studios is the worlds premium DFS white label provider. All the rest of the world companies with need to merge to even have a chance against us!

Believe it or not, Fantasy Football was first created in 1971 by an Englishman, Bernie Donnelly. At the time it was known as the “Donnelly Fantasy Football League”. Fast forward two decades to the 90’s and the concept got adopted by the likes of the Daily Telegraph, and everyone was scrambling for the sports section two weeks before the football season started, to pick their fantasy team and try and win the grand prize at the seasons end. As a Villa supporter, and being in secondary school at the time I remember insisting Andy Townsend would be a great acquisition, while the guy sitting beside me in Irish class insisted that “Villa are shit”. How right he was….

Fantasy Football in Europe has never been considered anything other then a branding exercise up until very recently. After all, how can you make money out of people who create one team a year, with the hope of winning 38 games later? Most of them dropped out after a few weeks upon realisingtheir favourite players were not necessarily the ones who made a good fantasy team. Then a lot of us just forgot. With only Match of the Day to follow on a Saturday night, and no live games unless you could afford Sky Sports, only a few fanatics had a chance of winning. So for bookmakers,newspapers, and other media outlets the Fantasy Football advertising at the start of a season  was mostly to attract users who would come in and spend their money on other things.

In 2013 across the Atlantic, the industry began to change. Two companies emerged, Draft Kings and Fan Duel. They had a different idea for Fantasy Sports that has evolved into “DFS”, Daily Fantasy Sports. With todays technology, users would be able to pick a team the morning of the games, and enter a tournament for that afternoon that would just count the points scored in the games that day. By dinner time, you could become a millionaire.
The growth of these two companies in a very short period of time was exponential. Mind boggling sums of money were invested from the likes of the MLS, The National Hockey League, 21st Century Fox, Google, NBC, Time Warner…the list of big names extremely impressive. Draft Kings became a billion dollar firm within 3 years of existence. There is just one problem according to the likes of ESPN – neither company has made a profit yet.
Commentators will point to legal costs due to recent legislative difficulties as being the big draw on cashflow, but the reality is when you spend hundreds of millions on acquiring customers, and only a tiny percentage of these customers have an actual chance to win with any sort of regularity, then its only a matter of time before customers become disenchanted, and impossible to retain. Reports of Insider Trading haven’t helped, but when you allow whizz kids to run algorithms and external scripts to predict who will score what points and when, well the mass market where the real money is will turn its back. Then the lifetime value of a client reduces radically and business models start to fall apart.
Upon the huge growth of DFS in the US, a couple of companies quickly popped up in Europe.
While the US market was catering to NFL and NBA lovers, Oulala and Mondogoal began catering for Football, or ‘Soccer” lovers. Both companies received early investment and produced slightly different games, but with the same B2C model as was demonstrated by their US counterparts. Perhaps it was too early for them to realise this model was not working before they adopted it for Europe, but it is arguably not this reason that they have failed to stick in the marketplace in two years of operation, and recently tried to pivot to Business to Business models.

The most popular Fantasy Football game in the UK and Ireland is the official Fantasy Premier League game which has 3.5million players. Its almost impossible to try and calculate the combined amount from the rest of Europe, but its safe to say there is a large market out there for the concept and the game. The official game is free to play, while many people create private leagues and bet amongst themselves on a weekly basis.

The key to the success of FPL, is how simple it is to play – picking a team, understanding the
points scoring system, having a chance of winning. You don’t need to be a rocket scientist to understand you get 3 points for an Assist, and a defender gets 4 points for a Clean Sheet. The average punter who likes a bit of football without being religious about it can get a lot of enjoyment out of the game, and not have to spend hours he doesn’t have researching very complex scoring systems. While these kinds of statistics are perfect for the Stat hungry US punter, the European’s have never been devoted to statistics nearly as much as the Americans, who produce weekly shows detailing individual player stats on network television.

With this in mind, the market shrinks massively leaving only a select number of experts who will have any real interest in playing such an advanced game, or any real chance of winning. Having to know who takes the corners and free kicks for each team in order to have a chance of winning is a step too far for the average user, and when that player who takes the corners scores points even if he doesn’t play well, it becomes a counter intuitive game for non experts. The end result is, even with both Oulala and Mondogoal pivoting to
a business to business model, the game is exactly the same with our without customer acquisition cost, and with such complexity I don’t believe they can be anything other then successful niche games when the industry takes off in Europe. The owners of the respective companies believe strongly in their concepts, however it remains to be seen if this strong belief will translate into profits in the long term, and it may well be too early for such niche strategies.
As someone who has taken a more cerebral approach before launching our DFS offering this
month with a 2 year production time on our software, I believe that the front runners in this industry have paved the way for the second generation of Daily Fantasy Sports companies in Europe. The last 3-4 years in both the US and European markets have shown the B2C models are not working, at least in terms of being profitable, and that complex games alienate the mass market which is there – ready, willing and able to play the game if its just tailored to their needs correctly. If I am right about our approach, the European market may look to consolidate in 2017, by which time a merger of the big two in America will most likely have taken place already. The are a small number of pioneers in the European market who have done great work so far to try and build the profile of the game. Perhaps if they can all consolidate to the same platform in 2017 the American companies will not find it so easy to dominate here.

Business Showcase : GameDay Studios

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