Fantasy Sports Venture Partners with NBA Franchises

June 24, 2015

fantasy-sportsThis week, industry leader FanDuel announced that it has agreed to exclusive multi-year partnerships with 13 individual National Basketball Association (“NBA”) franchises. This announcement follows FanDuel’s announcement from the fall of 2014 regarding its exclusive
4-year deal with the NBA itself, in which the NBA gained an equity stake in the company, as well as partnerships with 15 National Football League franchises. While the specific financial and time-based details of the deals are not yet known, the agreements will include grants of access to FanDuel for use of various marketing platforms, ranging from in-stadium digital signage and in-game promotions, to guarantees on Internet, television and radio advertising opportunities.

How are other professional sports associations and franchises affiliated with daily fantasy sports ventures?

This deal marks another line in the sand drawn between FanDuel and its main competitor, DraftKings, in their ongoing battle for exclusive agreements with the major professional sports leagues, and the individual franchises thereof. Whereas this announcement further deepens FanDuel’s ties with the NBA, Major League Baseball has an equity stake in DraftKings, as well as an exclusive league-wide, multi-year partnership.   Additionally, the National Hockey League (“NHL”) has also agreed to a multi-year deal with DraftKings, although the individual NHL franchises are able to enter into their own agreements with competitor websites.

Daily fantasy sports contests, and the websites that operate them, continue to increase both in terms of popularity and financial clout. By some estimates, FanDuel alone pays out in excess of $10 million in prizes each week. Additionally, industry leaders continue to incorporate innovative new means with which to engage long-time users, and entice prospective new consumers to join. For example, FanDuel has recently incorporated more frequent “experience” prizes, in contrast to cash prizes, to its contests, including the opportunity to meet Floyd Mayweather before his fight with Manny Pacquaio, backstage access to the festivities at the NBA All-Star weekend and a “GM for the Day Program” in collaboration with the Dallas Mavericks.

Continued Growth of Fantasy Sports

As daily fantasy sports businesses continue to innovate, expand their reach, and further take advantage of the preferred status offered by the Unlawful Internet Gambling Enforcement Act’s (“UIGEA”) narrowly tailored fantasy sports exemption, the interplay of business interests with the evolution of state law in this field will remain a significant topic for all gaming attorneys, fantasy sports lawyers and those interested in fantasy sports law in general.  Where you plan on engaging in, or operating, a fantasy sports or other gaming venture, it is important to retain competent legal counsel to help you design your contests so that they comport with applicable law.

If you are interested in learning more about this topic or pursuing a venture in this area, please e-mail us at info@kleinmoynihan.com, or call us at (212) 246-0900.

The material contained herein is provided for information purposes only and is not legal advice, nor is it a substitute for obtaining legal advice from an attorney. Each situation is unique, and you should not act or rely on any information contained herein without seeking the advice of an experienced attorney.

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