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FanDuel raises rake, DraftKings raises eyebrows as sponsored pro wins $1m

TAGs: daily fantasy sports, DraftKings, fanduel

fanduel-rake-raiseDaily fantasy sports fans are furrowing their brows after a DraftKings contractor won $1m via the site and rival FanDuel boosted its rake.

DFS pro Al Zeidenfeld placed first in DraftKing’s $5m Millionaire Maker on Sunday, netting a cool $1m for his troubles. But Zeidenfeld is a DraftKings’ sponsored pro, seemingly raising uncomfortable echoes of last fall’s ‘insider trading’ scandal that kicked off the rush to regulate DFS across the US.

But to be fair, while Zeidenfeld collects a check for promoting DraftKings, he isn’t an employee and a DraftKings rep promised Deadspin that Zeidenfeld didn’t have access to contest data or any other non-public information. As such, Zeidenfeld’s big payday isn’t likely to spark the same level of customer outrage that erupted after actual DraftKings staffer Ethan Haskell’s $350k DFS payday last fall.

A far louder hue and cry is likely to emerge as more customers – particularly high-volume players like Zeidenfeld – become aware that FanDuel has boosted the rake on many of its DFS contests.

Starting in NFL Week 3 (Sept. 22), FanDuel is now taking a 15% cut of customers’ entry fees on all guaranteed prize pools with an entry fee of $25 and under, meaning these contests will now rake between 2% and 5% higher than before. DraftKings currently takes a 13.5% cut from its Millionaire Maker, but for how much longer remains to be seen.

FanDuel has also eliminated the Monday Night Football games from its main slate, meaning players can now definitively learn whether or not they’re getting paid by Sunday night. The move appears intended to further boost rake by allowing Sunday winners to reinvest their winnings in a Monday-only contest.

On Thursday, the Wall Street Journal reported that FanDuel recently raised $55m via a new funding round, following DraftKings’ confirmation that it raised $153m in December (then waited nine months to alert the public). Both funding rounds were significantly smaller than previous ones, reflecting the diminished expectations of the DFS market post-regulation. FanDuel’s rake rise appears intended to offer investors some positive revenue figures to chew on while awaiting those still elusive profits.

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