Fantasy Football Numbers Unfazed By Scandal

• Despite the recent scandal, leading daily fantasy sports sites reported a season-best NFL weekend this weekend.
• The negative coverage surrounding the scandal may actually have served as a positive for the business by raising public awareness.
• The biggest threats to the DFS business many now come from regulators who have opened up multiple investigations of the scandal.

According to the most recent numbers from leading Daily Fantasy Sports analytics provider www.SuperLobby.com, the scandal involving employees of daily fantasy sports sites DraftKings and FanDuel using non-public information to profit by playing on rival sites has not hurt customer participation. In the wake of last week's media coverage of the scandal, SuperLobby is reporting that the two sites, along with Yahoo! Inc. YHOO, recorded their best weekends of the NFL season to date.

The Numbers

This weekend, DraftKings collected total NFL entry fees of $25.0 million, FanDuel collected fees of $20.5 million and Yahoo collected $1.3 million in entry fees. Both DraftKings and FanDuel experienced a season-best number of Guaranteed Prize Pool (GPP) entries this weekend. DraftKings registered 4.14 million entries, and FanDuel recorded 3.18 million entries.

No Such Thing As Bad Publicity?

The numbers indicate that, in the case of daily fantasy sports popularity, the scandal may have actually done more good than harm for the industry by raising awareness.

“Fears concerning the potential impact of the mainstream media’s negative DFS coverage last week appear unjustified,” SuperLobby CEO David Copeland said in an email statement.

Possible Regulatory/Legal Action

Although the customer base doesn’t seem concerned about the scandal, DFS companies may have more to fear from regulators. The New York Attorney General opened an investigation of both FanDuel and DraftKings. In addition, a federal grand jury has reportedly been convened in Florida to investigate whether either company has violated the law.

Disclosure: the author holds no position in the stocks mentioned.