User:Ben.belnap/sandbox

Partnerships
In the current scenario, the US Sports leagues are making deals with companies, which are involved in sports betting. The partnering process is done in secret and it building a base for earning profit by NBA, NFL, NHL and other baseball leagues in case laws are brought in effect, regarding legalization of betting in the US. As part of this initiative, NFL in the month of April becomes co-owner with Sportradar US, which provides odds, scores and statistics to the bookmakers. In July 2015, NBA acquired stake in that of FanDuel, and further became co-owner of numberFire, a tech company based in New York, offering betting recommendations on games for leagues. Major League Baseball and NBA are partners for equity in DraftKings and FanDuel, and these include 28 teams of NFL. NFLPA further has deals on licensing with FanDuel and DraftKings. Sportradar US has similar deal with FanDuel. The NBA on 12th November 2014, made an announcement regarding partnership with FanDeal. The partnership was done in light of the fan engagement and opportunities for business and potential of tracking irregularities. The NBA league acquired small stake (< 10%) of ownership in FanDuel, and in exchange made FanDuel, NBA’s official partner for fantasy. Silver mentions that by having stake NBA would be able to access inner activities of FanDuel. The partnership of NBA with FanDuel gave a sense of legitimacy to daily fantasy. FanDuel’s CEO Nigel Eccles, labeled the deal of NBA as true partnership. Silver, however emphasized that the NBA does not involve in decision-making in FanDuel and it is independent.

Legality
Many states have ruled that FanDuel and DrafKings do not operate within the state’s gambling laws. As of May 4th 2016, any residents of Arizona, Iowa, Louisiana, Mississippi, Montana, Nevada, New York, Washington and Idaho are not allowed to register on their sites. The most recent of these being Idaho. The Attorney General Wasden said, “The concern I have is that the paid daily sports offerings provided by these companies constitute gambling under Idaho law,” however, they are still allowed to offer free-to-play contests, but most users are registered for the chance to win big. Texas will be the next state to make a decision. FanDuel voluntarily stopped offering it’s services in the state in May of 2016, but DrafKings is still moving forward with court hearings. With the loss of Texas, and most recently Idaho, Fan Duel now operates in only 75% of the U.S. population.

Up until now online gambling has been thought of as a game of skill, therefore it was deemed legal. Each individual state will rule on whether or not they believe online fantasy sports gambling to be legal.

Marketing
FanDuel is using a marketing strategy that was adopted in the 1900’s by a small drugstore in North Dakota, Wall Drug. The Wall Drug Marketing Strategy is all about showing the consumer an overwhelming amount of advertisements until it is so engrained in their minds that they act. FanDuel has been showing so many commercials on television that ispottv, a company that tracks the amount spent on television commercials and the amount of commercials shown, has FanDuel listed as number one in market spending. This marketing strategy is directly related to the considerable amount of revenue FanDuel has made. Up until the legal trouble that FanDuel encountered, it was one of the fastest growing companies in America. FanDuel and DraftKings spent a combined $150 million on TV and internet advertising in the third quarter of 2015 which included the beginning of the football season. In the late summer of 2015 before the start of the NFL season there was on average a commercial every 90 seconds.

Acquisitions
In May 2015 FanDuel hired 38 of the 42 employees that were laid off by Zynga 365 sports. The vice president Mike Taramykin took over in a new position as Fanduels VP of product. He helped Fanduel to more than double their 80 employees over the next year. After raising $275 million in July 2015 FanDuel made its second acquisition in app developer Kotikan. Kotikan developed FanDuels mobile app, and it was decided that they would be brought in house to help further develop mobile offerings. The preceding month (August 2015) FanDuel acquired sports analytics company numberFire. While NumberFire will continue to operate independently, they were brought on board to help provide more data to players. CEO Nigel Eccles jumped at the opportunity to, “educate sports fans.” Fanduel moved very rapidly from not acquiring any companies its first six years, to acquiring three in a matter of a couple months. Although FanDuels revenue continued to rise in 2015, they currently face many issues with ongoing legal battles in many states. On February 10th, 2016 they filed a Workers Adjustment and Retraining Notification in preparation to lay off 55 workers from its Maitland office on April 10th, 2016. Fanduel decided to discontinue its research and development of outside games and applications.

Controversy
FanDuel has been the target of accusation over insider trading in the daily fantasy sports industry. In October of 2015 The New York Times reported that en employee of DraftKings inadvertently released data before the start of the third week of NFL games and won $350,000 on the FanDuel website. It was later released that DaftKings employees have make $6 million of the FanDuel website. DraftKings has stated that the employees could not have used their information to make decisions about FanDuel lineups, but data shows that DraftKings employees have one 0.3% of the $2 billion of prize money that FanDuel has given out. Also, 91% of the player profits at DraftKings and FanDuel were won by just 1.3% of players website. FanDuel and DraftKings have since prohibited their employees from playing in contests for money on rival websites.

The scandal brought more attention to the lack of regulation in daily fantasy sports and forced big investors like Major League Baseball to distance themselves and ESPN to cut down daily sponsor ads from its news shows.