Underdog Fantasy Says DraftKings, FanDuel Fear Competition

Underdog Sports, a provider of paid fantasy sports contests, claims DraftKings (NASDAQ: DKNG) and FanDuel are waging “back room” campaigns aimed at maintaining their duopoly and stifling innovation the day-to-day fantasize sports (DFS) arena.

In their too soon days, DraftKings and FanDuel pioneered the construct of DFS — a going from the traditional season-long formats that for years were the bedrock of the fantasy sports world. The concept was warm received among sports fans, specially because immediate payment prizes were mired though DFS wasn’t ab initio viewed as betting.

Following the 2018 Supreme Court ruling on the Professional and Amateur Sports Protection Act (PASPA), DraftKings and FanDuel leveraged DFS success past converting substantial portions of their client bases into sports bettors. Today, the two operators combine to controller about 75% of the US online sportsbook market, confirming that the DFS-to-betting templet is effective.

Founded in 2020 by Jeremy Levine in private held New York-based Underdog Fantasy believes DraftKings and FanDuel are afraid of the contention brought by parvenu DFS providers and that the ii behemoths are using political sway to defile smaller rivals.

Underdog, Others Pose DFS Threats to Established Rivals

While DraftKings and FanDuel successfully constituted DFS ascendency and parlayed that into a sports betting duopoly, the other face of the story is their DFS businesses endured some attrition because smaller players got tired of losing to “sharps” with high-end computer programs that made DFS into a career.

That player dissatisfaction opened the door for Underdog and other companies to innovate and securities industry DFS offerings that are more appealing to sports fans that aren’t spending 10 hours a daylight using engineering to establish lineups. Underdog claims it’s fantasise sports portion now exceeds that of DraftKings and FanDuel, underscoring wherefore those firms awe the young competition.

But Underdog and other companies innovating inwards fantasize sports and sports betting threaten their monopoly,” wrote Levine inward a missive to Underdog clients. “They’ve seen our company, and others, bring about superior products, more exciting user experiences, and commence to dispute them for sports fans’ attending — and they’re scared that we will take exception their market place positions. We’re already larger than they are inward fantasy. Frankly, they should live scared.”

Levine adds that DraftKings and FanDuel can’t evidence regulators that they don’t same rivalry so the operators are leveraging “a disingenuous narrative” that Underdog contests are illegal because they’re akin to sports betting.

That’s relevant because Underdog and some of its comparable competitors control inward states that are desired past the sports betting industry. Currently, Underdog offers its phantasy games in 41 states and its phantasy pluck ‘em games in 39 states. As just a few examples, Underdog is in operation(p) inward California, Florida, Peach State and TX — none of which feature militant sports wagering markets. Everglade State is the only when fellow member of the quartette to permit that activity and there, it’s controlled by the Seminole Tribe.

Underdog Says the Law Is on Its Side

Levine stated inwards the letter of the alphabet that the state-level laws, which he believes were essentially written by DraftKings and FanDuel lobbyists, spend a penny unmortgaged that phantasy sports are much broader than the salary cap methodology used past the II giants.

“Equally important, inwards nearly every res publica where a sports betting jurisprudence has been passed, the practice of law makes crystallization percipient that phantasy sports are non sports betting. Explicitly, these laws body politic that if a repugn is phantasy sports, it is thence non sports betting,” he noted.

Interestingly, while employed at StarSteet inward 2012, Levine designed the industry’s first-ever single-player phantasy game. It was later sold to DraftKings.

Perhaps farther rankling DraftKings and FanDuel is the peak that inwards some of the fastest-growing sports betting states, courts experience consistently held that Underdog’s offerings tantrum the measure as legal phantasy sports offerings.

“Regulators crosswise the country – including in states where nomadic sports betting is also sound – hold concluded our games perfectly conniption within the sound definition of phantasy sports. This includes determinations in Arizona, Colorado, and Indiana, where the same regulators manage both fantasy and betting, that our products are phantasy contests,” concluded Levine.

Thirteen months ago, Underdog raised $35 trillion in a Series b round out of financing, valuing the companionship at $485 million. Investors include Mark Cuban, Kevin Durant, Trae Young, Odell Beckham Jr., Breon Corcoran (ex-CEO Paddy Power Betfair/Flutter), Mitch Garber, Eilers & Krejcik, Liontree Partners, Kevin Carter, Gospel According to Mark Pincus (founder of Zynga), SV Angel, The Chainsmokers, Kygo, Steve Aoki, Nas, Future, Acies Investment and BlackRock.

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