Draft Kings Makes Major Changes To It's Affiliate Program

[MJM]

I'm sure many here received the email documenting these changes, this industry sure can be frustrating at times.

https://playinglegal.com/news/draftk...e-changes-2576

[JackTenSuited]

wow, those are some terrible changes. Though they forgot to add monthly quotas for the quadruple whammy!

[universal4]

It doesn't appear that any of the changes are based upon any legal changes, it's just a way to screw affiliates to make up for lost revenue in the states they have already lost, and clearly shows that although affiliates "were" valuable to them, they think they are bigger then the industry.

Just another case of screwing affiliates AFTER they were loyal and were instrumental in building the brand.

I do hope a handful of other groups step in with a good solid product and DK marketshare is completely lost.

Rick
Universal4

[TheGooner]

Taking a bigger view of the DFS situation.

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None of this is unexpected. Draft Kings is losing money hand-over-fist. So is Fan Duel.

The DFS these guys ran in the US was a popular product in a sports betting starved environment, and they've gone out and raised a lot of extra capital on the premise that they can turn profits.

The whole SAAS (Software As A Service) has been treated as some sort of special "Unicorn" in the business world, not just in gambling, there are numerous tech companies who have never made a profit but are capitalised on Share Markets as worth BILLIONS OF DOLLARS becasue they've posted some amazing customer growth.

I read that they raised hundreds of millions of dollars - and with that buy-in comes some serious business minds.

Then the individual US states say - HEY! This is sports betting WTF! No. (oops)
The expansion step into the UK has shown that DFS is not a magical cash machine when other sports betting exists (oops)
So the numbers around the cash-raising sales pitch around exponential growth prove to be over-enthusiastic (or plain wrong).

Well sh!T !! If numbers are not growing then the investors want to see some payback - or at least the potential of payback.

The investors want to see if the operation can turn a cash flow profit with the penetration it already has. So the first thing that has to change is the acquisition costs - TV ads slashed (tick), affiliate terms reduced (tick), customer deposit bonus eliminated (tick).

I would expect to see staff numbers slashed, and also (maybe) payout rates reduced as the companies try to show operational profits.

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It's not JUST the affiliate being squeezed - the entire DFS process was over-spending - and they were burning cash at an unsustainable rate.
This is just another BOOM-BUST scenario - unless they can get profitable before the cash runs out.

[golfbettingsystem]

Seeing a lot more interest in Draft Kings from UK users in our area recently but until now haven't promoted them as it feels to me that potentially cannibalising lifetime revenue customers with 2 years max & capped payouts isn't good for business.

Has anyone managed to secure a bespoke deal? Or asked for a bespoke deal and been flatly refused? Interested to hear if so.

[chaumi]

Has anyone managed to secure a bespoke deal? Or asked for a bespoke deal and been flatly refused? Interested to hear if so.

I imagine anyone trying for a deal would need to be showing some serious numbers and the potential for 'lifetime' depositors....which in the UK with DFS in its infancy (and not actually getting out of toddler stage by the look of it) will be difficult to prove.

Expect a few of the big US DFS affiliates (ex poker people who knew what they were doing) might have some chances of negotiating. They'll have a few years worth of their US based signups to show the value.

[golfbettingsystem]

I imagine anyone trying for a deal would need to be showing some serious numbers and the potential for 'lifetime' depositors....which in the UK with DFS in its infancy (and not actually getting out of toddler stage by the look of it) will be difficult to prove.

Yeah, got to be chicken and egg though for them - sample of 1 in a relatively small golf niche compared to football/NFL, however we could divert effort & traffic to DK but why do that at the expense of a lifetime revenue share deal, makes no sense whatsoever. Multiply that by however many affiliates and the growth needed to make DK profitable is stunted because affiliates who could be supporting it aren't due to the commercials.

[Syndicate]

Well said Gooner - These are the exact words i was searching for last week when an Israeli group asked us to finance such an operation.

I basically told them that we had a chance to invest in such about seven years ago, but we thought the idea was bordering on crazy. Afterall, the whole module is based on immature markets becoming regulated (or at least allowed), with the US being the focal point!

I'm at a loss why anyone would want to apply such a system in the UK, because nearly everyone of legal age would know what betting is about. Conversion rates are probably equal to those of tipping sites, with the added negative being extremely low stakes and encouraging people to bonus abuse.

I believe people invest in anything gambling related simply because they hear of the big money and success stories. Even serial entrepreneur Mark Cuban wanted ''action'', believing it would be easy to set up a Sports-betting hedge fund. The fact is the market is capped, with professional betting being the bigger the bank the lower the margin - The same applies to Fantasy Sports - you can't throw more in than the potential return and since the risk factor is big it's a bad bet!

Nevertheless, this thread was about another company going back on their ''word''. Im afraid it's becoming the norm, and i believe we are counting the days until nearly all established companies reduce their affiliate outgoings. The exception could be Asians/Pinnacle/SBO etc who rely very much on agents!

[DanHorvat]

I just don't see how could the American style of fantasy sports ever achieve mainstream success in the UK.

Yet some of the 3.8 million people who play the official Premier League game free of charge want to make money with their knowledge and skills. It's also a way for fantasy tips sites to monetize in a horribly undermonetized market.

I wouldn't expect FPL players to be too keen to place a bet. Though they could - their match prediction skills are superior to the average punter.

While fantasy sports in the US is a substitute for betting, in the UK betting and fantasy are two different worlds, IMHO.

[Sherlock]

I just don't see how could the American style of fantasy sports ever achieve mainstream success in the UK.

This is true. I try to test it on Uk traffic. While US results of this year are much worse than last year (I guess they are running out of tv-ad money etc.), in the Uk the conversions are more than 10x worse. On the top regular Uk traffic is more valuable for other forms of gambling.

I think we see the classic startup fail. Kudos to DK that they at least did not change the TOS retroactively, or at least they said me so. (Because now they have some nonsense quote for affiliates, that they have to deliver tens of players within 6 months [NFL pause has 7 months], or they can delete the affiliate account. I am probably not exactly quoting this ****, there was a thread about that I think at GPWA.)