Viggle and Sportech Team Up to Enter the Daily Fantasy Sports Market

Capitalizing on the growing popularity of fantasy sports businesses, Viggle Inc.

, the entertainment marketing and rewards platform, and Sportech, Inc., a subsidiary of Sportech PLC

, a global sports entertainment company, have teamed up to form DraftDay Gaming Group ("DraftDay") to purchase fantasy sports assets, specifically DraftDay, the third-largest operator in the daily fantasy sports industry, from MGT Capital Investments Inc. (NYSE MKT:

). By combining and capitalizing on the well-established operational business assets of DraftDay, Sportech and Viggle, the new company is well-positioned to become a significant player in the explosive fantasy sports market. To date, DraftDay has paid out more than $30 million in prizes with player retention and brand loyalty second-to-none in the fantasy sports industry. Viggle assets MyGuy and Viggle Football have already met with great success in offering exciting real-time interactive participation to its nearly 10 million registered users in tandem with professional and college football and basketball games. Sportech is one of the world's leading betting organizations, operating in 30 countries and employing more than 1,000 people. DraftDay Gaming Group will feature the popular DraftDay platform whereby users can draft a team within a salary cap, follow game action and reap rewards. It will continue to offer high-quality entertainment to consumers as well as to businesses desiring turnkey solutions to new revenue streams. More than 40 million people play season-long fantasy games annually in the U.S., but less than 5% currently play daily fantasy sports. The online poker market generates more than $20 billion of revenue annually, but entry fees to daily fantasy sports just topped $1 billion this year. DraftDay will provide entry for consumer brands into this exciting growth market. Sportech will manage the day-to-day operations of DraftDay. DraftDay will be the differentiated platform in the industry, with a leadership team highly experienced in B2B aggregated network operations and in regulated gaming markets. "DraftDay holds the potential to quickly disrupt the daily fantasy sports business with B2B partnerships including new ventures with companies within the regulated gaming industry," said President of Sportech's digital division, Rich Roberts. "Integrating DraftDay games within the Viggle app introduces significant potential to expand the user audience of U.S. sports fans while creating more visibility for DraftDay which we expect will continue to build in the months and years ahead." Significant for any advertisers, the Viggle app will be integrated into DraftDay games, providing greater access to U.S. sports fans. The highly targeted Viggle marketing, rewards and advertising platform will now deliver even greater access to the high-spending demographic of sport enthusiasts. Viggle users benefit as they will be able to play daily fantasy sports along while watching their favorite sporting events through real-time games right on their mobile phone or tablet, while reaping rewards. Last season, Viggle users answered 64.8 million predictive questions while playing Viggle Football. The joint entity will also benefit from the intended re-launch of MyGuy, a game that allows play-by-play substitution during football games. MyGuy takes daily sports fantasy one step further by letting users coach and play at the same time. Users playing MyGuy make game-time decisions just as the coach does. If your first pick isn't performing or if a new player is on the field, you can change your pick on the fly. Viggle users who join in the game with MyGuy can be rewarded for their quick thinking and shrewd choices. DraftDay Gaming Group also expects to continue to expand its selection of sports-related games to meet the clear demand for this form of entertainment. Commenting on the rationale leading into the deal, John Small, Chief Financial Officer of Viggle, said, "The combination of the DraftDay platform plus Sportech's gaming experience logically aligns with our avid existing base of Viggle App sport fans. The merged assets of DraftDay Gaming Group create a compelling win-win for both sports enthusiasts and the advertisers aiming to reach this demographic in a very targeted way designed to build brand loyalty. We expect our investment in DraftDay to provide a new revenue source, as Viggle users and advertisers now have even more reasons to continue enjoying what the Viggle app has to offer." Viggle Inc. will own 44% of DraftDay, Sportech, Inc. will own 35%, with MGT Capital and other shareholders holding the balance. Robert F.X. Sillerman will be the Chairman of the Board. Rich Roberts, current President of Sportech's digital division, will also serve as DraftDay CEO, Nic Sulsky, formerly of Sportech Digital, will be the President, and John C. Small will act as the CFO of both DraftDay and Viggle Inc. Larry Kom, who served as MGT's CIO, will join DraftDay as CTO and be accompanied by the full product development team. For more detailed information, please see the Form 8-K for Viggle Inc. and MGT Capital Investments filed for each company this morning.