Fantasy Sports Represents Big Business

Fantasy sports has become a billion dollar industry as players create fictional teams using their favorite players. Every sport from golf to football has a fantasy league in which players spend money to join tournaments and compete against fellow enthusiasts. As fantasy gaming picks up speed, two firms, FanDuel and DraftKings have emerged as industry leaders and investors are clamoring to get a piece of the fantasy pie.

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by Eilers Research showed that fantasy players are currently spending around $1 billion in contest entry fees; and that figure is expected to rise to $6 billion over the next five years. For DraftKings and FanDuel, that represents a hefty profit as the two control the majority of the market. Their dominance in the fantasy sports arena has made rumors about an upcoming merger or IPO an enticing bet for investors.

According to

, DraftKings has said it would considered merging with FanDuel, a move that would create a near monopoly for fantasy sports. Both firms have pursued marketing deals with just about every major sports franchise, leaving little room for new entrants to the market.

The next step for either firm will be to decide whether or not to go public. Analysts estimate that the fantasy sports firms are worth around $1 billion each and that their user bases are growing exponentially. With football season beginning this week, the sites expect to see a marked increase in activity. As fantasy football tends to be the most popular sport for both firms, they are likely to wait until January when the NFL season has ended to determine whether or not to go for more private funding or arrange an IPO.