BUSINESS

Australian media groups gambling on fantasy sports

TAGs: Australia, barry o'farrell, crownbet, daily fantasy sports, fantasy sports, Jasmine Solana, Nick Chan, TopBetta

Some of the biggest media companies in Australia are reportedly looking into investing in fantasy sports.

Australian media groups gambling on fantasy sportsThe Australian reported that TopBetta, a fantasy sports and wagering platform operator, had “early stage talks” with several traditional media companies about potential partnerships, with products to be launched as early as next year.

Sources familiar with the matter told the news agency that the interested media groups include Seven West Media and News Corp, publisher of The Australian. Crown Resorts’ Crown Bet is also considering investing in the fantasy wagering sector, according to the report.

If a partnership pushes through, TopBetta, chaired by former Seven COO Nick Chan, will provide a platform and gambling license to the table, while the media companies will bring in the audience and marketing muscle.

The news comes as former NSW premier Barry O’Farrell is about to submit his review into the Interactive Gambling Act. The outdated law is expected to get a major makeover, particularly on whether the Australian government should allow online “in-play” betting in sports—a boon for fantasy sports operators in the country.

The concept of fantasy sports experienced a surge in popularity across the United States this year, thanks to the increased promotion and coverage of daily fantasy sports products throughout national TV broadcast networks. In fact, DFS operators DraftKings and FanDuel spent a combined estimate of $31 million to drive many football fans crazy during the NFL first week.

Due to its explosive popularity, entry fees paid to join daily fantasy sports surged to more than $3.2 billion in the U.S this year, from $214 million in 2013. However, the wheels are rapidly coming off the DFS industry—at least in the U.S.—following the “insider trading” brouhaha that prompted DraftKings and FanDuel to bar their own employees from entering DFS contests.

Now, U.S. daily fantasy sports activity is on its eighth straight week of decline, with the worst performance to date for the headline operators. According to SuperLobby.com, both DraftKings and FanDuel reported effective margins of 10.8% and 11%, respectively, but their profits were largely due to the drastic cuts made to guaranteed payouts as activity level fell at both operators and across the entire industry.

Both operators are looking into other markets outside the United States. Recently, DraftKings announced that it is delaying its UK market launch until early 2016, while FanDuel is waiting to get its UK gambling license. There were speculations that the two operators might also look into the Australian market next year.

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