Daily Fantasy Sports Betting allows players to win real money and feel more connected to their favourite sports league by picking and setting a line-up of professional athletes that will accumulate points based on their actions in the game or match they are playing that day.
Fantasy sports is a very well established market in the United States that is continuing to grow at a rapid pace. At the beginning of Q4 in 2013, Forbes reported that NFL fantasy football alone had an estimated worth of USD $70 billion. Other popular leagues in the fantasy sports sphere include Major league Baseball (MLB), the National Hockey League (NHL) and the National Basketball Association (NBA).
Naturally, quite a few US-based iGaming operators saw the potential for this market and started integrating daily fantasy sports games as an exclusive or additional product housed under their brand. Players pay an entry or buy-in fee to enter the selected contests. The entree fees vary roughly between $0 and $25 from contest to contest, mostly due to jackpot sizes, which can be anywhere between $20 and $1 million.
Contests are tallied through a point system determined by the real-life results of the athletes on a customer’s team. The prize pool is either distributed to the winner or a predetermined amount of customers who rank at the top of the pool.
What is the opportunity for affiliates?
Affiliates who have US traffic that they are looking to legally monetize should strongly consider adding fantasy sports operators to their list of partners. Sportsbook affiliates should have no problem monetizing their US traffic through cross selling between real money betting in Europe and US fantasy sports as both markets have an appeal to their audience. Furthermore, the number of affiliate sites exclusively dedicated to US fantasy sports is not very large at the moment, making it the perfect time to capitalize on this market before it becomes oversaturated.
Advantages to promoting daily fantasy sports operators:
- Legally regulated in the United States: Most fantasy sports operators are licensed and regulated in the US, which makes them a safer option for players to go to instead of illegal offshore bookmakers.
- No licensing required: Unlike advertising iGaming brands based in New Jersey, affiliates do not need to apply for any licenses to promote fantasy sports operators.
- Player value: The average player value in fantasy sports is between $50-$100.
- Player volume: While volumesvary from brand to brand, top fantasy operators average up to 5000 new players per month through the affiliate channel, with 60% making a first deposit the same month they register.
Typical commission models offered by daily fantasy sports operators are performance based (CPA and/or revenue share). Most revenue shares are tiered between 25-40% and default CPAs range from $25-$50 with requirements such as a flat amount of net revenue or a predetermined amount of new depositing players.
Are there any barriers to entry?
As previously mentioned, there are very few obstacles for affiliates when it comes to promoting daily fantasy sports operators, as the brands are regulated in the US and there is no licensing process for advertisers. However, each brand has a small list of restricted states (usually less than 10) that is customarily shown on their website. Affiliates should also contact their affiliate manager upon joining to obtain a list of restricted states.