EU Daily Fantasy Sports Sites Must Rely on European Football
European daily fantasy sports operators are making decisions on which games to emphasize in their DFS contest lists. The obvious choice is European football, but the second and third choices are less obvious.
Valery Bollier, CEO of Oulala Games and expert on the subject of the online gaming industries, recently wrote about the dilemma European daily fantasy sports companies face. Bollier first discussed the origins of daily fantasy sports in the United States, which features a variety of sports which are converted to DFS gaming rather easily.
According to the co-founder of Oulala Games, Europe is the continent where daily fantasy sports is growing at the slowest rate. In a 2017 interview with SBC Global, Mr. Bollier said that DFS is gathering a customer base in India and Australia, which shows daily fantasy sports is no longer merely a US domestic product.
To grow in Europe, though, brings unique challenges. Europe-focused daily fantasy sports operators in the European Union must focus heavily on European football contests. Any attempt to seek long tail success with smaller sports is doomed to failure, according to Bollier.
US Leagues Fill the Sports Schedule
In the United States, the various major sports leagues live in symbiosis. While the NFL, NBA, NHL, and Major League Baseball compete for the same pools of customers, the seasonal nature of the sports mean they do not always compete directly for viewers. The NFL has a close relationship with NCAA football. The NBA closely coordinates with NCAA basketball. Both serve as an unofficial minor league system.
Beyond that, the pro sports often act in unison. The New Jersey sports betting case shows how the major sports leagues work in unison, as all four sports joined with the NCAA to sue New Jersey.
How US Sports Seasons Work
NFL football, the most popular sport, is a fall and early winter sports. By the time the NFL is winding down, the NBA and NHL are past their All-Star breaks and heading towards their playoffs. By the time basketball and hockey are finished, the second half of the MLB baseball season is set to begin. For two months, baseball has center stage.
By the time the baseball season gets to the pennant chase and the MLB playoffs, the NFL regular season has begun. But often, the NFL and MLB coordinate games with the networks, to avoid going directly against one another. In between the major team sports, individual sports like PGA Golf, ATP Tennis, and WTP Tennis fit their major tournaments.
It is no coincidence that the US Open Tennis tournament ends the week the NFL begins. The Sunday Week 1 games begin the day the US Open ends. The US Open golf tournament is the same, fitting into the lull after the NBA and NHL finals, but before the MLB All-Star Game. An American sports fan could set their calendar according to the sporting events all year. The NASCAR schedule goes 9 months of a year, but it includes a somewhat different demographic than many of the other US sports.
How US Daily Fantasy Sports Work
Because the sports calendar is filled with games every week of the year, US daily fantasy sports can offer a variety of DFS contests throughout the year. At any given time, two or three major sports are happening. The NFL receives more customers, but the NHL, NBA, and MLB have games every day or every-other-day, so they make up in volume what they lack in individual contest interest.
When sites that offer one-day fantasy contests include NCAA Football, NCAA Basketball, and NASCAR events — DraftKings does, FanDuel does not — a DFS site can draw a wide range of sports fans to play their contests. Even in American football season, a DFS owner can field teams on Monday, Thursday, Saturday, and Sunday.
Why European DFS Is Different
In European daily fantasy sports, the schedule does not work out so well. Yes, European football has big events throughout much of the year, but even then, the dominance of European football is problematic.
In sports betting, European football contests take up roughly 65% of the betting action. The same goes for DFS contests. But the EPL has only 2 matches a week per team and most European leagues are the same. DFS sites struggle to find other contests to highlight the rest of the week.
Tennis Bracket Challenges: Not the Answer
Tennis is the second-favorite sport with about 10% to 15% of sports bets, but daily fantasy sports sites are limited on what they can offer for DFS tennis. Because a contest requires results from two or more sporting events to be legal, tennis gaming is limited to “bracket challenges”, which have limited appeal to DFS gamers. Imagine a parlay in horse betting or an NCAA madness bracket to understand the limited appeal — it is games which rely more on luck than skill.
Why Long Tail DFS Contests Will Not Work
Valery Bollier wrote that European DFS operators relying on a variety of small sports (small: more obscure than tennis) are following a “long tail” strategy to generating business, but Bollier believes it is a losing strategy. Big companies like DraftKings might break into the European market by convincing European contestants to try their luck at US games which DraftKings already offers, perhaps by cross-promoting EPL football with American sports.
That might work with DraftKings (or might not), but European startups will have to focus on offering the best daily fantasy European football products to make an impact and be a major success. Valery Bollier suggests that the next 18 to 24 months will be the key time for European DFS startups to build a devoted customer base.
European Small Sports
Only once smaller sports become more fully developed will a long tail strategy be feasible. Even then, those getting into the European daily fantasy sports business in 2020 are likely to be far behind the pack. Now is the time to build a business and a strict focus on European football contests is the only way.
Most likely, only one or two European DFS sites are going to become major players in the industry. Daily fantasy sports is a growing industry, but even in the United States, DFS is small potatoes compared to sports betting. For instance, in last year’s Pennsylvania omnibus gaming bill negotiations, it was thought Pennsylvania online poker and casinos would account for $200 million a year, while Pennsylvania daily fantasy sports would account for $5 million. Pennsylvania is second only to Nevada in the United States in gaming revenues, so that number is indicative of American gaming statistics as a whole.
How to Compete with DraftKings and FanDuel
If only a handful of European DFS companies are viable businesses, then they will have to find a way to compete with DraftKings and FanDuel. Both companies face new regulations in the United States, so they will want to expand into Europe to continue attracting big investments from Wall Street venture capital firms and US sports media companies.
That makes the next 2 years the pivotal time for daily fantasy sports in Europe. European companies will need to become big enough to compete with DraftKings and FanDuel on a roughly equal basis within two years. The only other option is to become big enough to force DraftKings or FanDuel to buy them out to help one or the other collect more market share in European DFS. The clock is ticking.