The NFL season is just about here and DraftKings has secured enough funding to ensure it will be right there for you every week of the season.
According to a report from TechCrunch, DraftKings has raised $150 million in funding with the help of Revolution Capital, which includes AOL founder Steve Case and Ted Leonsis (owner of both the Washington Capitals and Washington Wizards). Although the daily fantasy company has not clarified how it will use that funding, it is not a wild guess to suggest it will be used in part to pay its customers when they win money. Or for advertising.
DraftKings spent a reported $156 million in TV advertising a year ago, and it should be expected the ads will continue, although perhaps not to the extreme extent of last season. It also helps having a major player in the NHL and NBA involved with the financing of the company, as the way sports leagues determine what to do with fantasy sports leagues continues to be discussed and evolve. They’re generally OK with daily fantasy leagues, even though daily fantasy sports is a form of gambling, which the pro sports leagues still oppose for some reason.
With this latest round of funding lined up, the question about the value of DraftKings remains in question as well. From TechCrunch:
While neither the company or firm disclosed valuation, many have said it was lower than the $2B post-money valuation that DraftKings received last summer. This makes sense, as the last 12 months has been particularly tumultuous for the company, as it has had to fight dozens of state legislatures and courts to get daily fantasy sports legalized in each state. At one point when DraftKings’ legal situation in NY was looking particularly gloomy there was even a rumor that DraftKings would have to merge with FanDuel, its biggest competitor, to stay afloat.
In short, DraftKings is probably still a valuable brand, but it is far below where it once was before the war on daily fantasy sports was declared.