all major sports leagues, while playing for cash and prizes. With traditional fantasy leagues the drawbacks are the season-long commitments, often lasting up to eight months with users having to keep track of their teams the entire time with the payout at the end of the season. New fantasy league sites have popped up that offer daily and weekly contests to better serve sports enthusiasts.
Two of the biggest players in the fantasy sports space are DraftKings and FanDuel. Based in the United States, both sites offer free or paid contests with no season long-commitment offering a quicker payout for users.
FanDuel
FanDuel was the pioneer of online fantasy pools, exploding in popularity in its first two years. The site is run as a salary cap format allowing users to pick the players they want for each day. The site offers up to $6 million in prize money to be paid out every week, with new contests daily. Claiming the biggest league selection to its users, FanDuel has more than 12,000 one-day leagues for users to join every day.
DraftKings
Originally focusing on US-based sports, baseball and football, it now offers a variety of contests in all five major leagues (MLB, NHL, NFL, NBA and PGA) as well as college football and basketball. The site is a salary based cap system, which means users have a fixed $50,000 budget to spend on a full roster of players. Unlike traditional fantasy leagues, DraftKings Salary Cap drafting takes just minutes to complete. Over $200 million guaranteed in prizes to thousands of winners with contests daily with winners paid out at the end of each day as soon as the games are over.
DraftTeam (DFS:CNX)
Similar to DraftKings and FanDuel, DraftTeam has moved away from the traditional fantasy league system and has embraced the daily, no season-long commitment strategy to make for a more satisfying and fun experience for users. DraftTeam offers contests in football, baseball, hockey, and basketball with more sports leagues in the works. Entry fees can be from zero to $500, fitting every user’s budget as well as their schedule. Users are able to form private leagues, collaborate with friends, or challenge other users, creating a competitive yet fun fantasy environment.
Adapting to the online social environment, DraftTeam has positioned itself for steady growth with the adaptability of their site to mobile devices such as smartphones and tablets. Users can play the games on any device connected to the internet and receive real-time updates on the status of their teams.
The fantasy market is exponentially growing, and it is not about finding the new fantasy space, but building on the existing market and developing a unique brand. DraftTeam has been steadily growing and will continue its success with the use of daily contests and its mobile app. I believe that now is a great time to get in on the fantasy league market, and benefit from the popularity of mobile apps.
Even if you’re not a sports enthusiast, I encourage you to visit their website here and take a look for yourself.
The reason I like DraftTeam (DFS) so much is because we can quantify the return on investment (ROI) based on the number of dollars the company allocates towards marketing. What I mean by this is that the company already knows their customer acquisition cost. So they know that if they spend X number of dollars on marketing, they will most likely generate Y number of users. In my opinion, based on some of the initiatives the company has put in place so far, I believe the company is poised for significant growth. With companies like DraftKings and FanDuel leading the charge, and if DFS is able to implement their plan and reach their goals, the timing couldn’t be better. The company is currently valued at a mere $2.7 million. Unfortunately both DraftKings and FanDuel are privately held companies, so we can’t share in their success. However, DraftTeam is one of the only publicly held fantasy sports gaming websites out there in the market today offering investors around the world a chance to take a piece of this potentially very lucrative business.
DraftTeam.com has an extensive marketing initiative scheduled for the 2014 NFL, NBA & NHL seasons, which should drive more traffic and ultimately increase its user base. After speaking with DraftTeam’s management, the company anticipates to potentially have over 40,000 members by March 31, 2015 year end and if that were the case, the company should be profitable shortly thereafter on an annual basis. On February 4, 2014 the Company completed a 5-for-1 consolidation of shares, meaning the cheapest available paper at that time was $0.25 cents. Subsequently, DraftTeam raised $720,000 at $0.075 that was purchased by myself, management, key personnel and existing supportive shareholders, so the stock should be in very good hands.
Here is what we should be on the lookout for:
- Increased visibility and number of users based on the recent launch of the mobile website which has been designed with social media interface and functionality
- The launch of a new Mobile App and game features scheduled for release prior to the 2014 NFL Football season
- Extensive marketing geared towards customer acquisition during the 2014 NFL, NHL and NBA sports seasons for both the DraftTeam.com web and mobile platform, as well as the new mobile App
- PGA Golf to be completed by year end
- Plans for International expansion in 2015 with launch of European Fantasy Soccer Leagues on DraftTeam.com
So there you have it. Make sure to keep ($DFS:CNX) on watch now. This is a story that is only going to prove itself out over time so don’t expect its stock price to jump 100%-200% based on a single news release. This play is meant for long-term investors that believe in the concept and business opportunity the company is pursuing. The fantasy sports world is a very hot sector right now and if DraftTeam is able to allocate their marketing dollars in the right way and increase their number of users, DFS could be a very profitable business. I will have more updates to come so definitely stay tuned.
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