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Cuban deal with Fantasy Labs 'recharges' DFS industry11 January 2016
With a seemingly never-ending string of injunctions, insider trading controversies and cease-and-desist orders, DFS operators have been a virtual punching bag for lawmakers and mainstream media. But last week, the entire industry got a much-needed elixir from one of the most celebrated entrepreneurs of this generation.
And it did so without getting grilled on the set of Shark Tank.
Mark Cuban, renowned billionaire businessman and owner of the Dallas Mavericks, has become an "investor and strategic partner" with Fantasy Labs, which offers proprietary DFS data, tools and analytics to its growing customer base.
Terms were not disclosed, and the deal surely will not put a rest to the arrows being slung at DFS giants like DraftKings and FanDuel. But, make no mistake about it, the news was crucial to an industry starving for vivacity.
"It's been an exciting few days; that's for sure," Fantasy Labs President and co-founder Dan Fabrizio told Casino City from his office north of Boston after his company made the announcement last Thursday. "Obviously the industry has seen a lot of negative momentum the last couple months. So, we were real excited for our company and the entire industry to have a real big name like Mark Cuban come in and say he believes in the viability of daily fantasy sports.
"We're recharged by this news. I think the industry as a whole sees this as a real positive and a sign that daily fantasy sports will be sticking around for a long time."
In a statement, Cuban said, "The explosive growth of fantasy sports, and its involvement with new categories of competition like eSports, increase the need for high-end resources like the platform offered by Fantasy Labs. I'm excited to be involved with a company that is working to advance an industry that is poised for huge growth."
Two years ago, Fabrizio also saw DFS as an industry "poised for huge growth." The Boston-area native is the founder of Sports Insights, which he launched in 1999 and which provides sports-betting software, picks, real-time odds and other data.
"We saw daily fantasy as another way to use all of the [Sports Insights] stats and data, but instead of using it against the point spread you could use it to predict individual player performance," he explained. "I knew we had the technical knowledge to do it, but not being a daily fantasy expert, we needed to partner with someone who had the industry knowledge."
Enter Peter Jennings and Jonathan Bales. Jennings, a former stock trader from Colorado notorious for his success as a DFS pro with more than $20 million in gross lifetime earnings, and Bales, a DraftKings analyst and author of the "Fantasy Sports for Smart People" book series, joined forces with Fabrizio to become the fantasy sports "know-how" part of the equation for Fantasy Labs. The company officially launched right around this time last year and has blossomed in its role of providing tools to serious DFS players.
"I would compare us to what Bloomberg provides to the financial industry," said the 41-year-old Fabrizio. "We aggregate everything you need in one place — player news, information from Twitter, injury updates, weather reports. There are also tools to help you analyze players and create your own player models. So, instead of spending hours and hours trying to build your own spreadsheet, we put everything at your fingertip."
Fabrizio said many in the industry scoffed at Fantasy Labs' $60-per-month-fee for an all-sports package, in addition to offering plenty of free information on the website.
"People thought we were nuts because the industry standard for providing player projection info was around $10 a month or more like $60 for a season," he said. "We came in on the real high end because that's what we wanted to be viewed as. We built something that's really on the cutting edge and we proved that there are a lot of upper-echelon players doing this professionally or semi-professionally that realize the product is well worth the $60 a month."
So much so that over the last six months the company has been approached by multiple outside investors, but decided to respond with a "thanks, but no thanks." That is, until Cuban came along via a previous introduction through Jennings.
"[Cuban] is such an incredible entrepreneur and such a big name in the sports and business world," Fabrizio said. "Once he started to speak with Peter about it and we had a chance to make it a reality, it was a no-brainer."
In an article posted on the Fantasy Labs website, Bales wrote that "bringing on Mark is a strategic move that we couldn't pass up."
"We identified Mark as the 'dream investor' from the start, for obvious reasons — his track record of helping entrepreneurs and his heavily involvement in sports — as well as his data-driven nature and connections in the world of sports analytics," Bales said. "When we launched Fantasy Labs, the goal was to become the industry leader in providing daily fantasy sports players with the data, tools and analytics necessary to compete at a high level in DFS. We feel like we've been able to prove that concept, supplying a truly unique and profitable way of approaching daily fantasy sports. Now, we want to take our game to the next level. With Mark's help, we feel like we're going to be able to significantly enhance the quality and range of products we offer."
As for the future of the industry, Fabrizio remains bullish, just like he was a few years ago, before hundreds of millions of dollars were spent on television ads and DFS became a hot-button topic for cable news shows and presidential debates.
"I really hope we see all of these states go the way in which Massachusetts is trying to go and set up a regulatory framework," he said. "The states have to realize there is a correct way to do this that would be beneficial to all. Regulation would be the best thing for the industry, and that's what I think we'll see happening over the next few years."
Cuban deal with Fantasy Labs 'recharges' DFS industry is republished from Online.CasinoCity.com.
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