The deal came a day after DraftKings, FanDuel’s biggest rival, announced that it will start offering fantasy eSports in its betting lineup.
“With over 200 million people globally watching eSports, AlphaDraft gives those fans a way to engage with this burgeoning entertainment product that creates an enormous opportunity for us,” FanDuel CEO and co-founder Nigel Eccles said in a statement.
Terms of the acquisition deal between the two companies were not disclosed, but Eccles called the merger between FanDuel and AlphaDraft a “win-win” situation for both companies. FanDuel, like DraftKings, is very much focused on professional sports, while AlphaDraft was targeted solely on professional video gaming.
“This is sports for a new demographic, with very little crossover with what are considered traditional sports fans, and this acquisition gives us the ability to leverage the expertise of AlphaDraft’s team, while helping their efforts in customer acquisition and building awareness of this new industry,” Eccles said.
AlphaDraft is actually one of the first two platforms to offer fantasy eSports services early this year, alongside Vulcun. Founded in 2014, the platform offers free and paid contests, where participants are allowed to draft a new team every day without season-long commitments, and also compete with other fans without having to create their own fantasy leagues.
DraftKings and FanDuel’s decisions to enter the eSports market underscore the growing allure of competitive video gaming. Market research firm SuperData estimates some 134 million people around the world watch eSports, helping the industry generate more than $600 million in annual revenue.
However, it’s important to note that majority of eSports fans are from Asia, a market both DraftKings and FanDuel have yet to tap into. Even DraftKings CRO Matt Kalish admitted that the eSports market is “relatively small” in the United States.
DraftKings has already started its worldwide domination plans, with London as its first stop. It’s only a matter of time before FanDuel follows. The two sites are considered to be leaders of the fantasy sports pack, currently dominating the daily fantasy sports market with a combined 96 percent share, according to Eilers Research. But that’s good news for the other platforms, which will enjoy the spillover effect when the time comes that DFS becomes widely adopted.
eSports is still a very young business and is going through a lot of issues, such as match-fixing and DDOS attacks. But if there’s money to be made in that sector, DraftKings—and now, FanDuel—will definitely want to get a piece of the pie.
