Punch Drunk Wonderland

Will online gaming affect fantasy sports?

Fantasy sports may face stiff competition from some segments of the online gaming market

Fantasy sports has beeOnline-Casinon one of the fastest-growing pastimes in the US. In the five year period ending in 2012 alone, the number of fantasy sports players in the US was estimated to be around the 33 million mark, translating to annual revenues totaling $3.38 billion.

The faster-paced daily variant has also captured an impressive slice of the market despite being relatively new. Although daily fantasy sports games became widespread only in the past few years or so, they now account for about a third of the US fantasy sports market according to The Financial Times. The daily fantasy sports market is currently valued at $1.2 billion and is expected to grow at rate of 7.6 per cent annually.

Some analysts believe that the popularity of fantasy sports leagues – the daily variety, in particular – is a reaction to the tightly-regulated online gaming market. For the past few years, players in the US were severely limited in their choices when it came to online gaming. Late last year, however, online gaming finally managed to penetrate the New Jersey market, an important foothold towards expanding into the rest of the US.

Land-based casino corporations were quick to cash in, setting up partnerships with online entities to help bolster more traditional revenue streams. Trump Plaza, for instance, inked a deal with UK-based betting service Betfair’s casino.betfair.com.

FanDuel Sign-UpNow that online gaming has established itself in New Jersey, will we see a decline in fantasy sports players as they once again flock towards it? That has certainly been the case in some fantasy sports markets outside the US where online gaming is more widely accepted. The presence of online casinos and betting sites give fantasy leagues tougher competition. Will the US fantasy sports market end up with a similar fate?

According to Marc Edelman, an expert on fantasy sports law at New York’s Baruch University, there’s little chance of it happening as long as it’s just online slots. “The legalization of online slot machines in some states will do very little to cannibalize the market for daily fantasy sports,” he told The Financial Times. Online poker, however, may end up eating into the same player base.

Whatever happens, both online gaming and fantasy sports seem to be inextricably intertwined. Gaming Today reports that American Gaming Association President and CEO Geoff Freeman has even warned that the loss of online gaming may spell disaster for fantasy sports as well.

 


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