If you needed another clue that daily fantasy sports has arrived, one needs to look no further than news announced by Yahoo on Wednesday that the tech-heavyweight would be entering the daily fantasy sports (dfs) market. The announcement from Yahoo.com came during their 1st quarter earnings conference call that which they indicate they plan to launch sometime this summer — just in time for the 2015 football season, which also happens to be the peak of fantasy sports season.
Upon launch, Yahoo will figure to immediately have a huge impact on an industry that has already seen tremendous growth over the last few years. Fanduel and Draft Kings currently control a vast majority of the market share and have been landing huge funding deals of late. Companies such as Yahoo had previously shied away from the industry due to legal uncertainties, despite the industry being insulated fairly well by the 2006 carve-out in the UIGEA .
The Yahoo Potential
Yahoo’s entry into the daily fantasy sports industry, will almost certainly make them a force to be reckoned with in the competitive space almost overnight. According to Alexa.com, Yahoo are the 4th largest website in the world and are home to over 800 million monthly users, 6 million of which play already play traditional fantasy sports. Many of their dedicated and engaged fantasy sports customers have also been playing for over a decade. With its six million users, Yahoo is already one of the leaders in seasonal leagues, although ESPN reportedly passed them as number one in 2013.
Despite being limited as an advertiser for daily fantasy sports websites — now competitors — over the last few years, Yahoo has offered real money seasonal daily fantasy sports leagues recently, with buy-ins up to $250 for its football leagues.
The Yahoo Impact
Yahoo’s reach offers an unprecedented opportunity to grow the daily fantasy sports industry. Yahoo will have ability to cross-market their new product aggressively to their dedicated and engaged users of their traditional and seasonal fantasy sports product. Daily fantasy sports growth has seen exceptional over the last few years, but many of the tens of millions of fantasy sports players who play in seasonal leagues have not moved over to the daily fantasy sports game yet, which is still in a stage of relative infancy. Yahoo’s marriage with daily fantasy sports will give the industry a game changing opportunity to bring new players to the game.
Now comes the question of how long it will be for other fantasy sports sites, including household names such as ESPN, CBS Sports and Fox Sports, to join the daily fantasy sports bandwagon. We can be sure that these leaders will be watching very closely and that could soon be following Yahoo’s lead.