Despite reports of cheating, the two largest fantasy sports companies, DraftKings and FanDuel had a record number of participants last weekend. The two websites combined to attract 7.1 million entries into their guaranteed prize pool tournaments. In the process, they generated $43.6 million in contest entry fees.
The companies have been aggressively marketing their guaranteed prize pool games. These games work by having participants draft a team of real-life athletes on a weekly basis, and if the athletes do well, the participants do well. This is particularly popular for fans of the National Football League (NFL).
Many of the top prizes for these games reach millions of dollars.
The cheating allegations come from a report that an employee of DraftKings had been participating in and winning hundreds of thousands of dollars on games on FanDuel. There was no direct evidence found that the employee in question used insider information for personal profit. However, it raised speculation that employees of the websites have an unfair advantage over the general public.
While people who work for fantasy sports websites are not allowed to participate in games on the site that they work for, they have been known to enter the contests on competing websites. This has supposedly caused public distrust against DraftKings and FanDuel, though it does not show in their revenues or the number of entries into their contests.
Major fantasy players plan to stay involved. The world’s top-ranked fantasy participant Saahil Sud stated that the controversy is not a big deal.
Sud said, “I don’t think that anyone feels directly cheated, but there’s a concern that someone could do it.”
Sud went on to acknowledge that if the top players exited fantasy sports, it could cause a decline of confidence in the public and it might threaten their livelihoods, as some people try to make a living off of fantasy sports.
However, some smaller customers are more concerned. Occasional fantasy enthusiast Bryan McWethy said that he closed his fantasy accounts because of the possibility of unfair play. He went on to say that he feels as though he is at a disadvantage to big-time players who spend more time and money on fantasy sports. He said that he no longer believes that he has a realistic chance to win on the websites.
Meanwhile, the fantasy websites want to do everything in their power to keep participation at a high. The websites lose money if they don’t fill tournaments, and they are more attractive to hosting websites if they can attract large crowds.
Both DraftKings and FanDuel are valued at more than $1 billion each. Both have spent massive amounts of money on advertising, as daily fantasy advertisements have been virtually inescapable on television since the start of the NFL season just five weeks ago.
But despite the controversy at hand, the fantasy websites are going strong, and they don’t appear to be slowing down.