Commentary

Fantasy Scandal: Will Draftkings And FanDuel Change Their TV Advertising?

by Wayne Friedman , Staff Writer, October 7, 2015

The NFL and other sports leagues have always had an uneasy relationship with businesses promoting gambling and/or “gaming”-- in Las Vegas and other places. Perhaps now that might extend to include “fantasy” sports leagues.

DraftKings and FanDuel, two of the biggest sports fantasy platforms, where the average consumer can win thousands -- if not a million -- dollars, have been hit with an “insider trading” scandal, according to a story that broke in the New York Times.

Seems a DraftKings employee used inside information to play on the competitor FanDuel site, winning $350,000. Now both companies have issued an unusual joint release saying they will prohibit employees from playing in their fantasy sports contests.

Besides insider trading, detractors of the fantasy team business also assert that it is “gambling.” But fantasy sports leagues refute the gambling moniker, saying that fantasy playing is a “game of skill,” not a “game of chance.”

And these companies are definitely not leaving marketin to chance, becoming incredibly voracious TV advertisers -- especially now with the NFL season in full swing.

According to iSpot.tv, from Sept. 1 to Oct. 6, DraftKings spent $69.3 million in TV advertising; FanDuel, $61.2 million.

TV/media companies are closely associated with these companies. Fox has an an 11% stake in DraftKings; Time Warner and Comcast has stakes in FanDuel. Additionally, ESPN struck a $500 million advertising deal with DraftKings.

But back to the insider trading scandal: “For a casual fan considering play, this will give them pause,” David Geller, chief executive officer of TopLine Games Labs, which created the fantasy site DailyMVP, told CNBC on Tuesday. “You have to be very naive to consider that this isn’t going to have some impact.”

It has. ESPN has suspended DraftKings-sponsored news segments and on-air billboards; DraftKings has pulled virtually all regular advertising on the network. Not only that, but already there is big talk of federal regulation of the business.

The question going forward: Will DraftKings and/or FanDuel change their respective advertising -- or slow down total ad spending -- as a result?

gaming, tv

2 comments about "Fantasy Scandal: Will Draftkings And FanDuel Change Their TV Advertising?".

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Michael Pursel from Pursel Advertising, October 7, 2015 at 3:02 p.m.
FYI: The Draft Kings person received the inside info AFTER they had made their selections and it was too late to change them. Does not make it right. So yes there was insider trading after the fact. However, it looks bad. It stinks to any simpleton fan who thinks they can put $200 down and win big. It is skill. You need to pick the right players.. and hope they live up to your predictions. I don't play. The ads are tempting.. but "When the offer sounds too good to be true..."
Apparently the advertising worked too well. Great Placement with excellent follow up on sports sites. Total campaign they ran is well executed and you cannot miss them. Maybe a few others should rethink pulling out of TV and putting it all on line? Hummm... Ed Papazian has it correct guys. Traditional TV is NOT Dead, this is proof.
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Paula Lynn from Who Else Unlimited, October 23, 2015 at 2:21 p.m.

Snake oil sells.