An Australian startup wants to take an advertisement-paid version of the controversial daily fantasy sports concept into the mainstream locally, and is seeking a $10 million capital raising round to get it off the ground.
Sydney entrepreneur Daniel Simic said that even though his new venture PlayUp resembles similar businesses in the USA, it’s internationally the only site that makes it free to play, thanks to advertising.
“We’ve already signed up over 100,000 people to play, which is well beyond our initial expectations. We’re also seeing strong retention rates, so fans are coming back for more competition and prizes,” he said.
Fantasy sports, which sees fans select athletes for their squad to compete against other fans throughout a season using statistics from real-life performances, has been around since before the internet. However, the subset genre of daily fantasy sports (DFS) has taken off in the US in the past five years, along with a public debate on whether the practice is just thinly veiled gambling.
The two dominant DFS providers in that country, FanDuel and DraftKings, have fought state authorities, such as in New York and Nevada, which sought to ban them on the basis that they’re really illegal gambling providers.
Simic’s business seems to sidestep those ethical and legal questions, however, because users do not pay any money to play, even though they’re eligible to win prizes. The site is funded by advertising, with “prize money” that can be redeemed within its online store to buy items from merchants like Rebel Sport, JB Hi-Fi, Dominos, Super Cheap Auto, Hoyts and BCF.
The platform, which currently offers daily fantasy games for the NRL, AFL and international cricket, has reportedly enjoyed success in India and is now seeking to raise between $6 million to $10 million to scale up the business and explore international markets.
Simic, who is aiming to add the NBA, A-League, EPL, NFL, T20 cricket, Kabaddi (an Indian contact sport) and eSports to the PlayUp site, said daily fantasy has caught on with wider appeal than traditional fantasy games because there was no season-long commitment.
“Millions of new daily fantasy sports players have come into the market in just the past few years alone. By making it more accessible and offering the opportunity to win real prizes, without any entry fees, we hope to take fantasy sports to the next level in Australia and around the world,” he said.