Amaya-owned PokerStars has a tight grip on the rest-of-world online poker market, but is still looking to get a foot in the door of the U.S. market.
While an entry via New Jersey seems likely later this year based on comments made by Amaya’s David Baazov last month, the company CEO indicated that Amaya will also be expanding its operations to include the burgeoning Daily Fantasy Sports (DFS) industry. Information provided by eGaming Review reveals that that goal may be achieved by acquiring DraftDay, a DFS site owned by MGT Capital Investments.
“In recent weeks, MGT has communicated with several parties expressing interest in a potential investment or purchase of DraftDay,” an MGT spokesman told eGR. “The company is reviewing multiple indications of interest in an effort to create maximum value….”
Duel for DFS Supremacy
DraftDay currently ranks third in the DFS industry behind behemoths FanDuel and DraftKings. Together, those two top operators have captured 95% of the U.S.-facing DFS market, with the bulk of that (65%) enjoyed by FanDuel.
The pair have been on a marketing spend binge as of late. The DFS industry is still in its beginning stages, a crucial time in which market shares are won and lost. DraftKings recently picked up a $250 million investment from Walt Disney for a stake of 20% in the company, putting the no. 2 site in position to perhaps grab more customers.
Regarding DraftDay, eGR put the asking price at roughly $10 million, but indications are that MGT would like to keep 20% in company shares as well. With DFS wagering permitted in the U.S. and considering the trajectory the industry is currently on, it makes sense to hold onto a piece of the action.
Amaya Marketing Plan
Whether Amaya could grab a larger chunk of DFS market share – if and/or when the rumored acquisition becomes a done deal – remains to be seen. However, a keen marketing idea would be for Amaya to target the U.S. players who patronized Full Tilt and PokerStars before the DoJ delivered its Black Friday knockout that changed online poker forever.
Cross-marketing between online poker and daily fantasy sports could perhaps be a goldmine for Amaya – if and when the company is allowed into the U.S. in the regulated gambling space. That day will eventually arrive – with New Jersey the likely jurisdiction of entry – but it’s best to wait until it actually happens considering at least two previous reports of expected approval by state gaming regulators that turned out to be untrue.
Yahoo in the Mix Too
Yahoo has also announced an upcoming foray into the DFS market. The particulars have yet to be revealed, but a summer launch is expected.
A recent projection by Eilers Research estimated that the DFS industry may be worth $2.6 billion by the end of the decade. Due to excessive marketing expenditures, neither FanDuel nor DraftKings have gotten out of the red as of yet.