FanDuel


FanDuel Group is a New York City based bookmaker and daily fantasy sports provider. Originally founded in 2009, the service is the second largest DFS service in the country, behind DraftKings, based on entry fees and user base.
In May 2018, FanDuel agreed to be acquired by Irish bookmaker Paddy Power Betfair. The company's existing U.S. operations were merged under FanDuel, seeking to leverage FanDuel's existing brand recognition and userbase to expand its U.S. sports betting business.

History

FanDuel was founded by Nigel Eccles, Lesley Eccles, Tom Griffiths, Rob Jones and Chris Stafford on July 21, 2009, as a pivot from Hubdub, a news prediction site, after taking in $1.2 million in venture capital funding from Pentech Ventures and Scottish Enterprise. In 2010, FanDuel held its first "FanDuel Fantasy Football Championship." The event consisted of ten users who won entry into the event by winning a qualifying league throughout the NFL season. First place was awarded $25,000 and the total prize pool was $40,000.
On January 30, 2013, FanDuel announced that it had closed an $11 million Series C funding round. In September 2014, the company announced $70 million in Series D funding. In July 2015, FanDuel announced a Series E funding round of $275 million leading the company to be valued at over a billion dollars. Shortly after announcing the fundraise, FanDuel acquired sports analytics company numberFire. In September 2015, FanDuel acquired the e sports focused DFS service AlphaDraft. In October 2015, The New York Times reported that an 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 revealed that DraftKings employees had made $6 million playing on FanDuel. DraftKings stated that the employees could not have used their information to make decisions about FanDuel lineups, but data showed that DraftKings employees had won 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 on the website.
FanDuel and DraftKings have since prohibited their employees from playing in contests for money on rival websites.
In May 2015, FanDuel hired 38 of 42 employees that were laid off by Zynga 365 sports. After raising $275 million in July 2015 FanDuel made its second acquisition in app developer Kotikan. Kotikan developed FanDuel's mobile app, and it was decided that they would be brought in house to help further develop mobile offerings. The preceding month 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”. Shortly after the acquisition of numberfire, Fanduel went on to acquire the fantasy eSports company AlphaDraft. Fanduel moved very rapidly from not acquiring any companies in its first five to six years, to acquiring three in a matter of a couple months.
On November 18, 2016, DraftKings and FanDuel announced an intent to merge. The combined company would serve over five million users. On June 19, 2017, the Federal Trade Commission announced that it would seek a preliminary injunction to block the then proposed merger. The FTC felt that the proposed transaction would give the combined company 90% of the market of DFS in the United States, which it considered to be a monopoly position. The merger was subsequently terminated.
In September 2017, FanDuel and DraftKings each paid $1.3 million to settle with the Massachusetts Attorney General's office over allegations of unfair and deceptive practices by the companies prior to 2016. In November 2017, Nigel Eccles left the company. He was replaced as CEO by Matt King, who was previously CFO. Co founder Tom Griffiths left the company shortly thereafter, replaced by Nik Bonaddio, formerly of NumberFire, as Head of Product.

Acquisition by Paddy Power Betfair, expansion to sports betting

In May 2018, Ireland-based bookmaker Paddy Power Betfair announced its intent to acquire FanDuel. Paddy Power Betfair planned to contribute $158 million and merge its existing assets in the United States into FanDuel; Paddy Power Betfair holds a 61% controlling stake, with the option to increase its stake to 80% and 100% over time.
The sale came in the wake of the Professional and Amateur Sports Protection Act of 1992 — which effectively outlawed sports betting in almost all states in the United States — being declared unconstitutional by the Supreme Court. FanDuel had been preparing to offer a sports wagering platform, while Paddy Power Betfair stated that the acquisition would make it "exceptionally well placed to target the prospective sport betting opportunity."
The sale was completed July 11, 2018, with Paddy Power Betfair's operations in the United States becoming known as FanDuel Group. Betfair paid $465 million in cash, which was significantly lower than FanDuel's internal valuation and resulted in a $120 million lawsuit in Scottish court by Lesley Eccles, former head of marketing for FanDuel, and other founders. FanDuel will serve as Paddy Power Betfair's primary operating brand in the United States.
A few days later, Paddy Power Betfair opened its first FanDuel branded sportsbook at the Meadowlands Racetrack in New Jersey. In March 2019, a FanDuel sportsbook opened at Valley Forge Casino Resort in Pennsylvania. FanDuel also offers online sports betting in Indiana, New Jersey, Pennsylvania, and West Virginia.
In August 2018, FanDuel announced that it had partnered with Minute Media to create The Duel, a new site for fantasy/sports betting information generated by fans. In November 2018, FanDuel became the first official daily fantasy and sports betting partner of the National Hockey League, in a multi year contract which grants FanDuel exclusive DFS rights. In February 2020, FanDuel reached an agreement with Scientific Games to serve as the technology partner for its current and future sports betting operations.

Awards and recognition

2016