Billion Dollar Fantasy: The High-Stakes Game Between FanDuel and DraftKings That Upended Sports in America

Billion Dollar Fantasy: The High-Stakes Game Between FanDuel and DraftKings That Upended Sports in America

By:  Albert Chen

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APPLE BEST BOOK OF THE MONTH SELECTION

"We devoured [this] engrossing account of the battle for supremacy between three fantasy gaming sites. ... Chen flips the script with a character-driven narrative, exposing the people who fueled the industry (not necessarily the folks you’d expect) and what motivated them (not necessarily unadulterated greed). Gamers will find this book impossible to put down, as will anyone who loves a good origin story."Apple Books, Best of the Month selection

"Fans of financial thrillers such as Barbarians at the Gate will be excited by this insider account of the dizzying rise of fantasy sports websites"—Publishers Weekly

You've seen the commercials. Here is the untold story behind the clash of billion dollar companies that unleashed an unprecedented advertising war.

From Sports Illustrated's Albert Chen comes the story of two companies whose battle unleashed a carpet bombing of advertising as they sought supremacy in an exploding fantasy sports and gambling market: In a time of gushing venture capital money, FanDuel and DraftKings turned into billion-dollar companies seemingly overnight — then, just as quickly, found themselves the target of FBI and Department of Justice investigations, and facing likely destruction.

Chen tells the story of the improbable individuals behind the saga: An Irishman who knew nothing about American sports. A fantasy geek who felt it was his destiny to change the way fellow nerds watched the games they loved. A conflicted poker player. A mother of three in Scotland.

In a character-driven narrative with excursions into the strange and unexpected, Chen takes us from casinos to board rooms, from Edinburgh to Wall Street to the Vegas Strip, to tell a sprawling and intimate tale of the new world that this group of accidental disruptors helped to create. It’s a story of ideas and dreams, about a world of risk, luck, hubris, greed and redemption—a story for our high-stakes times.

Available Resources

  • Format: Hardcover

  • ISBN-13/EAN: 9780544911147

  • ISBN-10: 0544911148

  • Pages: 304

  • Price: $27.00

  • Publication Date: 09/10/2019

  • Carton Quantity: 12

Albert Chen
Author

Albert Chen

Albert Chen is a Senior Editor at Sports Illustrated, where he has authored over a dozen cover stories for the magazine and specializes in longform features. He has covered baseball, football, sports business, and gambling. He has also written for Fortune, among other publications, and been featured on CNN, NPR, MLB Network, and ESPN Radio. He has a bachelor's degree from Yale University and lives in New York City with his wife and son.
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  • reviews

     “We devoured Sports Illustrated writer Albert Chen’s engrossing account of the battle for supremacy between three fantasy gaming sites. Billion Dollar Fantasy centers on the late 2000s, when FanDuel led the pack in the emerging, theoretically legal market of online sports gambling, with DraftKings and DraftStreet hot on its heels. Chen flips the script with a character-driven narrative, exposing the people who fueled the industry (not necessarily the folks you’d expect) and what motivated them (not necessarily unadulterated greed). Gamers will find this book impossible to put down, as will anyone who loves a good origin story.” 

     —APPLE, BEST BOOK OF THE MONTH SELECTION 

      

     “In this entertaining debut, Sports Illustrated editor Chen examines a decade of online fantasy sports…Fans of financial thrillers such as Barbarians at the Gate will be excited by this insider account of the dizzying rise of fantasy sports websites.” 

     —PUBLISHERS WEEKLY, STARRED REVIEW 

      

    “The battle between FanDuel and DraftKings to dominate the sports betting market is not a complicated story. The two startups have done essentially the same things over the past decade to stay alive, spending hundreds of millions of dollars on advertising and making deals with sports leagues . . . There’s a bit more to the story, of course, conveyed with vividness and reportorial precision by Albert Chen, a Sports Illustrated writer and editor, in 'Billion Dollar Fantasy.' The two companies, Mr. Chen notes, have given sports fandom a new, and lucrative, dimension . . . ” 

     —WALL STREET JOURNAL  

      

     “The battle for online fantasy sports supremacy was a roller-coaster ride for its two contenders: DraftKings and FanDuel. Chen (senior editor, Sports Illustrated) captures the action in this energetic and entertaining account of DraftKings CEO Jason Robins, FanDuel CEO Nigel Eccles, and chief marketing executive Lesley Eccles, and how these three visionaries turned online gaming ideas into two unicorn (assets of $1 billion) companies. Chen presents lively stories, especially of Lesley Eccles, who succeeded in an overwhelmingly male-dominated arena. In addition, the book is laced with profiles of the DraftKings and FanDuel partners, venture capitalists, and higher rollers who gambled heavily.”  

     —LIBRARY JOURNAL 

     

    “A rollicking, riveting account of an improbable startup war that invaded all of our living rooms and helped pave the way for sports gambling across America. Magic/Bird, Red Sox/Yankees, Federer/Nadal . . . FanDuel/DraftKings: The same rivalry dynamics that fuel such passion and tribalism in sports come alive in this addictive account that’s about so much more than the business of sports. For anyone who's ever had a billion dollar fantasy, it’s both an inspirational story—and a cautionary tale.” 

    —L. JON WERTHEIM, 60 Minutes correspondent and coauthor of New York Times bestseller Scorecasting 

     

    “When FanDuel and DraftKings exploded onto the scene, I thought "I'm not sure one of these businesses can work. How possibly can two?" In Billion Dollar Fantasy, Albert Chen answers all the questions about the strange intersection of sports, gambling, startups and fast money that spawned these improbable companies. A great read.” 

    —PETER KING, NBC Sports 

     

    “Highly engrossing . . . A wild ride . . . A conventional business story, this is not. In Billion Dollar Fantasy, Albert Chen tells the story of how the improbable multi-billion-dollar daily fantasy sports industry was born with unforgettable set pieces, everywhere from Edinburgh to Vegas to, hell, even Harry Potter World. Readers are taken inside the psyches of the major players as the top companies took off, nearly crashed after the government and public turned against them and gained new life, thanks to the recent Supreme Court decision that legalized sports betting in America. This book is like fantasy sports: once you start, you won’t stop.” 

    —SEAN GREGORY, senior correspondent, Time  

     

    Billion Dollar Fantasy is The Social Network, only more scandalous. Albert Chen has written an exhilarating, cinematic account of the rapid rise and fall and rise again of a pair of odds-defying unicorns, and the bootstrapping impresarios who created them. This book deserves to be devoured by gamblers and entrepreneurs, in poker rooms and boardrooms alike.” 

    —BEN REITER, New York Times-bestselling author of Astroball and senior writer, Sports Illustrated 

     

    “Suggest this both to fantasy-sports participants and to readers of Ben Mezrich’s The Accidental Billionaires (2009), about the founding and growth of Facebook.” 

    —BOOKLIST 

     

     

  • excerpts

    They were sitting around a conference room table, face to face, for the first time. On one side were the Brits: with their lilting accents, measured demeanors, and pale complexions, they seemed more like a group of academics than tech entrepreneurs. On the other side were the investors from America who had blustered into glum, gray-rinsed Edinburgh from the glitz of West Los Angeles: perfectly coiffed and, as the Brits later marveled to each other, tan — so improbably tan.  

    These visitors, partners from the private equity firm Shamrock Capital, looked around at the office space, which was a dreary contrast to the glimmering tech offices in the United States: dimly lit, cluttered, decorated with an incongruous mix of British propaganda posters and a curiously curated collection of American sports paraphernalia. They were here because they believed that the Brits’ creation, a startup company called FanDuel, was the key to unlocking the future of sports in America, though when they saw the cheap stickers of NFL team logos slapped on the walls next to outdated posters of players on former teams from forgotten eras, the visitors had second thoughts. It was 2014 — what was Brett Favre in a Vikings uniform doing here? 

    They may not have been authentic sports fans, but the Brits possessed the credentials that suggested they had the experience and intellect to lead a transformative company. Nigel, the boyish, cerebral CEO, was a former media executive and McKinsey man, and that morning, as he presented a picture of how they were going to win the exploding fantasy sports market in America, the Shamrock partners were reminded of why they had felt, when they first met with Nigel months earlier, that the CEO’s analytical, efficient approach aligned perfectly with theirs. 

    The investors were also familiar with the two technologists who unveiled FanDuel’s new product features. Tom, the chief product officer, was Cambridge-educated, a former PhD candidate, and Rob, the creative director, had already had a hand in cofounding three startups; their collective talent was reflected in the new app, which was as sleek as a Bentley. 

    The Shamrock partners, however, were not yet familiar with the fourth founder, the last to take the floor: Lesley's job was to take the money they had raised and turn it into paying customers. Now, not only was FanDuel a company with tens of thousands of paying customers playing their online game, with millions of dollars of revenue flowing in weekly, but it was also, with a new infusion of capital from the new partners from Shamrock, a startup with over $70 million of investment money bubbling in their tank. 

    “This is a make-or-break year for us,” Lesley declared to the room. “We’re going to have to be very aggressive.” 

    The screen behind her changed to a slide that described an evolving market. Because FanDuel rewarded winners with prize money, many were beginning to view the games they offered — a subset of fantasy sports called daily fantasy sports games — as a kind of Trojan horse brought into the sports gambling market, territory from which media companies and sports leagues had long been excluded. But now, with a new NFL season weeks away, not only was a media titan, ESPN, in play as an advertiser, but professional sports teams were also returning Lesley’s calls, eager to strike deals. 

    “We can’t hold back,” Lesley said. There was another factor, she added, just as critical to consider: a startup that had entered the space only two years earlier but was willing to burn through astounding sums of cash to acquire customers. Their ads were appearing on TV and radio and billboards across the United States, everywhere from Boston, the company’s home base, to Las Vegas, where it was catching the attention — and ire — of regulators and gambling operators. 

    These new rivals seemed hell-bent on taking over the fantasy sports world, even if it meant blowing up the entire industry in the process. They were called DraftKings, though some in the industry called the company by a different name: the suicide bombers. 

    Earlier that summer, there had been rumors swirling in the industry that FanDuel was closing in on a monster investment; the word was that Nigel had been able to secure $40 million. Soon after, around the time of Shamrock’s visit to Edinburgh, DraftKings announced it had closed on a venture-capital-backed Series B round. That total: $41 million. The number was a warning shot. 

    The suicide bombers were coming. 

    *** 

    Was the game spinning out of control? Was the growth in this unregulated industry sustainable? Onlookers, even some within the companies, would see the dynamics at play in this battle for supremacy between FanDuel and DraftKings and see not a winner-take-all game but a classic case of game theory. 

    One of the best-known examples of game theory, the Prisoner’s Dilemma, provides a framework for people to understand the balance between competition and cooperation in cases of economics, politics, international relations, human behavior, and business. In the Prisoner’s Dilemma, there are two players. Each has a choice to make: cooperate or defect. Each player makes the choice without knowing what the other player is about to do. Defecting yields a bigger payoff than working together. The dilemma is that, if both defect, they are both worse off than if they’d cooperated. 

    By the fall of 2014, the two daily fantasy companies were growing so large that it was becoming very difficult for another business to replicate the success of the two leaders; the amount a new company would have to raise and spend was enormous. It was becoming a two-horse race. The companies would soon have a choice to make: whether to cooperate — to get on the same page with their regulatory messaging, to not push the legal envelope with the games they were offering, to control their spending on tournament sizes and marketing — or to remain two competitors hell-bent on doing whatever it took to kill the other. Like Craigslist, daily fantasy was a marketplace business of liquidity — it was not a sports betting business where everyone could set up the house. You needed a liquid market, and most of those businesses were winner-take-all businesses. 

    It was always optimal for each company to be aggressive since its payout would be improved that way, and so neither company had an incentive to cooperate. Market factors (the size of contests they offered and their advertising spend) and the inability to collaborate (because of the rivalry between the two companies) created a dilemma for FanDuel and DraftKings. The two entities could simultaneously pursue an efficient approach to achieve an outcome that was positive but not the best outcome for each of them. If one company chose to be aggressive while the other took a more efficient route, the aggressive company would take the dominant market share. If, however, both companies were aggressive, the two could be far worse off than if they had cooperated. 

    The hyperaggressive approach was always at odds with the safest way for the industry to move forward: both companies spending efficiently on all fronts, coordinating messaging on the regulatory front, developing relationships with attorney generals across the country, and focusing on sustainable growth while taking the time to institute controls to protect the industry and ensure that the legal scaffolding was solid. An aggressive strategy yielded a higher short-term payoff than cooperation, but if both companies chose to be aggressive, then both could fare worse in the end than if they had cooperated. The complicatio...

Available Resources

  • Format: Hardcover

  • ISBN-13/EAN: 9780544911147

  • ISBN-10: 0544911148

  • Pages: 304

  • Price: $27.00

  • Publication Date: 09/10/2019

  • Carton Quantity: 12

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