Daily fantasy sports site DraftKings acquires DraftStreet
Monday, July 14, 2014
Posted by: Meg Van Petten
The second- and third-largest daily fantasy sports sites are joining forces. Boston-based DraftKings, Inc. will announce its acquisition of DraftStreet and merge the two companies Tuesday morning.
The takeover will increase DraftKings' customer base by more than 50%, according to CEO Jason Robins, who says the move puts the company on par with the industry's largest site, Fan Duel. Financial terms were undisclosed.
"It's going to be essentially an unnoticeable difference either way," Robins told USA TODAY Sports. "I think the true impact in the long run is from a product and experience perspective is having all those things that made two separate sites -- DraftStreet and DraftKings -- be able to thrive with a loyal user base."
Fantasy sports players who have accounts on DraftStreet will be able to log into their accounts and either cash out their winnings or move them over to DraftKings. Robins said a 100% transfer bonus should help make the transition a bit easier.
Still, the loss of the No. 3 daily sports site will definitely have an impact among fantasy players.
"It's really hard for me to say if it's good or bad. What I can say is, it's reality," said Michael Rathburn, a daily fantasy sports analyst for Rotowire.com. "It's not great for the players because DraftStreet is a different product and there was a lot of volume on that site."
There will be no immediate changes to the suite of DraftKings offerings, but a major focus in the acquisition was incorporating some of the more popular elements on DraftStreet into the games on DraftKings.com.
"In the end what players should see is a combination of both sites," Robins said. "It's not going to happen overnight, but the goal is not to just bring the users over, it's to bring all the elements of DraftStreet."
Another benefit, he said, is that it will allow the company to offer "definitively larger" prize pools than Fan Duel does. For example, DraftKings will be hosting the largest daily fantasy league in history, the $3.3 million Guaranteed Fantasy Baseball Championship, this August.
Even with the merger, Robins said there will still be room for consolidation and innovation within the daily fantasy industry.
"There's always an opportunity to do something new and cool with the game inside the game," he said. "The companies that continue to innovate and continue to put out great new stuff are going to continue to get attention regardless of whether there's one or two big players now."