Fantasy sports is a huge, lucrative business that generates millions of dollars in revenue for companies like FanDuel and DraftKings each year. If you want to start a fantasy sports business like them, this article will help you research the market, competition, best time to launch, required team structure, and development costs.
The fantasy sports industry is growing by leaps and bounds despite a raging pandemic ostensibly bringing the world to a screeching halt. The global fantasy sports market hosts more than 80 million users as of 2020, a number which is rapidly growing at the rate of 30-50%. In the North American region alone, the industry has seen a player base that has ballooned to over 60 million users.
Needless to say, the US harbors the largest market for fantasy sports. According to recent polls, the US market size for fantasy sports reached 8.3 billion USD in 2021. The US harbors the most prominent market for OFSP’s in the world, with a global market share of over 68%. The region is expected to experience further growth because of the perpetually ascending count of players, strong internet infrastructure, and popularity of sports like Football, Basketball, and Baseball.
Furthermore, the success of popular American platforms like FanDuel, DraftKings, and Fantasy Draft has continued the upward trend of the OFSP sector in the country.
The above numbers indicate how popular the industry has become and how far it has come since its inception decades ago. If there was ever a time to invest in the US OFSP sector or launch a fantasy sports platform of your own, then that time is now. Although extremely lucrative, one shouldn’t jump into the sector hastily without proper knowledge, planning, and assistance.
The legal situation surrounding sports betting is rather murky in several states of America. Whether or not you will find the law troubling will depend on the individual state in which you hope to launch your fantasy sports business. As per the Unlawful Gambling Act passed by Congress in 2006, fantasy sports was considered a game of skill and as such legal for operations throughout America.
A federal-level document was passed soon after which led to the sector spreading across the country in no time. Sadly, despite this act, many states simply chose to ignore the regulation. This resulted in different states having different laws regarding OSFP’s in the industry. While some states allowed the industry to flourish, others banned OFSP sites from operating in their territory.
It is also very difficult to determine which states in the US allow OFSP’s and which do not. There are four states where fantasy sports have always been considered illegal. They are Arizona, Washington, Iowa, and Montana. Many sites also don’t function in states like Nevada, Hawaii, Alabama, and Idaho.
The states that currently accept DFS players are as follows
With the exception of Mississippi, sites must pay a sum in licensing fee to operate in all of the above-mentioned states. US states that currently accept DFS players and have introduced regulatory legislation are,
Popular sites like DraftKings and FanDuel are already operational in about 80% of states in the country. The legal situation of fantasy sports operations is a volatile one in the US. The picture is constantly shifting. It will be in your best interest to keep yourself updated with the most relevant laws and regulations to understand which states allow fantasy sports and which do not.
Apart from legal hurdles, there are several other factors to consider beforehand to launch a fantasy sports platform that can succeed, satisfy the needs of avid players and carve a strong niche for itself in the already crowded US market.
As an entrepreneur, it will be extremely beneficial for you to go through each of the below-mentioned tips step-by-step. You must have a clear motive, a well-conceived plan, and a concrete goal established before you even seek help from an app developing partner.
You cannot build a strong foundation for your business without thorough research. This is also true for fantasy sports as well. You must study and understand all the necessary elements that will come into play in the development and launch of your fantasy sports platform. So do your due diligence with regards to the legality of OFSP’s in your state, your competitors, the demography you intend to target and the most popular sports consumed by your targeted user base. Armed with adequate knowledge about the market, you stand a better chance of succeeding in your endeavors.
After developing a blueprint for your business, determine the audience type you will target. In a recent survey, conducted by FSGA it was found that almost 81% of fantasy sports players were males. Almost 50% of these players were in the age range of 18-34. Moreover, a majority of these players were employed full-time and earned a salary of roughly $75000 annually. Knowing your audience will help you promptly target only those who are likely to engage with your platform and help it grow in the process.
To earn the trust of your users, you will have to cater to them with precise and imperative data consistently about sports contests. So partner up with a data feed provider that enjoys a good reputation in the industry. They should be capable of providing accurate data in real-time to help your business develop a strong relationship with the players.
As we mentioned before, the US harbors the largest fantasy sports market in the Industry. The biggest global names in the industry enjoy unparalleled success in the country. Needless to say, competition is high. Hence, you need a robust marketing strategy to cut through the noise and make your presence felt in the industry.
Harness the power of popular social media platforms to spread the word about your brand. Employ referral bonus tactics to entice users into inviting their friends and family to the platform. If you have the funds to spare then engage in cross-promotional activities with other brands to reach out to as many potential players as possible. Remember marketing isn’t something you can skip out on. The success of your business will largely depend on how well your app or website was promoted.
Companies must spend money on marketing in order to make money. FanDuel and Draftkings both pay a lot of money to obtain massive traffic spikes during peak sports hours. This implies that both FanDuel and DraftKings must produce significant income, which they do through advertising. According to Adam Krejcik, managing director of digital and interactive gambling for Eilers & Krejcik Gaming, FanDuel spent around $20 million on TV ads, resulting in a $68 average client acquisition cost. Despite the high cost of acquisition, Krejcik estimates that FanDuel will profit $100 per customer per season.
DraftKings made $14 million in sales in 2018, while FanDuel made $10 million. Entrance fees from players are a source of revenue for both companies. These companies make money in a variety of ways. Revenue is generated by selling advertisements on their websites and working with major brands such as NBC, Sports Illustrated, Comcast, and Sporting News. Professional sports leagues see a huge opportunity to engage existing fans while also attracting new ones.
It is imperative to decide which sports type or league your fantasy sports application will focus on. In the US, for instance, the majority of players (almost 79%) like to engage with fantasy football. So it is only obvious to include football in your offering if you intend to succeed in the industry. Football isn’t the only popular sport in the country though. Here is a list of other popular fantasy sports played by users in America.
It will be considerably more beneficial to offer more than one fantasy sport to players to cover more ground in the market. It is a known fact that platforms that offer more than one option are more likely to succeed than those that offer no choice whatsoever.
The features you offer will play a great role in the eventual success or failure of your OFSP endeavor. So make sure you have an app that offers multiple intuitive features. The functions must be user-friendly and focus on enhancing the user experience.
Considering the features most popular platforms in the US possess, here is a list of all the features a fantasy sports app or website must possess.
A powerful admin panel reduces complicated, time-consuming processes with our and allows you the luxury of time, and the opportunity to flow without constraints. The key features of the admin panel are
Every user touchpoint & interaction like signups, deposits, site rake, app usage, should be represented by intuitive graphs & data points to help you gain insights, understand trends, & track the KPIs of your business.
You should be able to create custom reports for various business units, such as user activity, contests, finance, or referrals.
Independent game management modules can control the operational functionalities of the games offered on the platform, allowing operators to run and manage various game types with ease.
A marketing module that allows you to better target the appropriate player at the right time and provide them with a genuinely personalised experience. You may learn about their behaviours, personas, preferences, and what inspires them in real time. To maintain customer happiness and retention, you can develop plans, campaigns, and communications around it. Users can be divided into groups to receive communications via email, SMS, in-app notifications, and push notifications.
In order to keep up with the financial liabilities, the software should provide a clear idea about your income details, tax liability, or eligibility for a refund, to ensure proper credit flow.
To improve the app's performance, a machine learning-based algorithm can be developed and implemented on a fantasy Sports App Platform. As a result, the administrator will be able to adjust odds for the app based on the user's behaviour history.
A decentralised network for monitoring transactions for the fantasy sports business model can be created with the help of a Blockchain app development company. This gives fantasy app users and administrators more control over payment processes.
Custom Bot API for any sport, be it cricket, football, or any other, may be easily integrated by fantasy sports app development companies with competence in API and Chat development. The technology will respond to practically all potential themes and stats that are significant to the teams, players, team vs. team, player vs. player, and recent information
You can also consult with your developer to include a unique feature that could help attract more users to the platform.
Another very important decision to make is the platform you will employ to launch your platform. You have the option of either launching a website-only platform or opting for a mobile-only application. Although mobile OFSP’s are relatively more popular than websites, it is still beneficial to provide multiple options to your users. Launching your fantasy sports platform as a website and mobile app simultaneously helps you cover more ground while also making it more convenient for users.
Ultimately the development process boils down to this fundamental factor. No matter how good your marketing strategy is or how much capital you are willing to invest, the success or failure of your fantasy sports business will depend on whether or not you have a reliable software developing partner.
The software development company you choose for your project must possess experience in developing gaming solutions similar to yours. They must harbor the resources, expert developers, and knowledge needed to develop a fantasy sports platform that is capable of going toe-to-toe with some of the best in the American fantasy sports industry.
If you are looking for a developing partner that can build a money-making fantasy sports platform for you, then look no further than Vinfotech. Vinfotech’s custom fantasy sports software and white-label software can help you launch your fantasy sports business in no time. With our strong experience and a rising number of happy clients from around the world, we are just the allies you need to bring your dreams of dominating the American OFSP market to life.
Vinfotech creates world’s best fantasy sports-based entertainment, marketing and rewards platforms for fantasy sports startups, sports leagues, casinos and media companies. We promise initial set of real engaged users to put turbo in your fantasy platform growth. Our award winning software vFantasy™ allows us to build stellar rewards platform faster and better. Our customers include Zee Digital, Picklive and Arabian Gulf League.
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