FanDuel auditors express 'significant doubt' over company's future

[The Buzz]

... FanDuel recently released its annual report, which showed the company enjoyed record revenue of $87.7m in the 18 months ending June 30, 2015. However, pre-tax losses came to $94.9m, compared to a loss of only $11.3m in its previous report.

FanDuel blamed the escalating losses on its decision to "significantly" boost its marketing and product development, while insisting that the company's financial reserves – which fell from $274m to $47.8m as of June 30 – are sufficient to see it through the coming year.

Read more from Calvin Ayre: http://calvinayre.com/2016/05/16/bus...ompany-future/

[TheGooner]

This form of sports gambling is a dead duck ..
It never made a profit in the US when it was considered the only "legal" online sports gambling product.

Deciding on a European campaign in a highly competitive sports betting market is/was throwing money away.

I've no doubt that they can pare the losses back - staff layoffs / advertising cuts etc .
But make money on their current fee structure? Unlikely - in the end it's not an attractive sports product.

[universal4]

In this post, Gooner very clearly predicted that DFS was burning too much cash at a rate they would likely not be able to sustain and suggested that Fan Duel would likely suffer the same fate.
https://www.gpwa.org/forum/draft-kin...tml#post809490

JT's video discussed the connection between fantasy sports and online gambling here
https://www.gpwa.org/forum/online-ga...-a-226003.html

Back in November it was reported that Fan Duel was running behind paying players out
https://www.gpwa.org/forum/fanduel-r...rs-225137.html

In fact we have had many discussions a mumber of times the last 6 months or so on Fan Duel and Draft King.

After having gone back and re-reading some of them, I think many of us were starting to question the long term viability of them, at least in the form they were in.

I agree with Gooner in that in order for them to survive at all, I think they will have to make many sweeping changes and cut costs to the bone, which may in turn hurt the affiliates in such a way as to make in unattractive for many of us to promote them.

Rick
Universal4

Search strings to find many of the discussions is either "dfs" or "fan duel"

[Sherlock]

I also doubt the profitability of the model. I do not know about DFS, but DFS or even gambling in general combined with startup approach (e.g. the horrible attempts of UK bookies like Ladbrokes or Betfred to expand to continental Europe) is I think not very good way to do it.

The chances in the USA were maybe higher when DFS was kind of a legal gambling, but since now situation is changing and DFS is being considered gambling, the attractivity goes down.

But that said does not mean affiliates could not make money there. I have apparently made a mistake here, because there were offered 25-50USD CPA deals, but I went with revenue share. DFS were converting like crazy during NFL season. I am looking at rev share per depositing customer now, I am at 12 USD per customer. I do not think I will ever beat the 50 USD CPA, but I hope this season will make it over the 25. (The 50 USD was only if 100+ players were delivered I think and maybe the small depositing customers were not counted, so it is not that bad).

Either way they will not get as much of my action like last year. I do not trust DK affiliate software, Fanduel is ok. Talked to FD AM, he for sure is a capable person, but they obviously are in deleveraging mode.

IMO - if even such a thing as eSports can exist - DFS can be profitable and nice supplement to gambling but not at the projected scale and pace.

[TheSpry]

DraftKings has already slashed the affiliate program to shreds. They have also raised the barrier to entry for the mid to smaller affiliates. Essentially if you do not send 50 depositors within a 6 month period they can terminate the program. They launched this right during the slowest time for new player acquisition. I belive it was in February they did this. I bet come the end of july and beginning of August we will see a ton of affiliate accounts get shut down.

With that said, anyone body want to buy a super high ranking DFS site that has sent 50 rmp's already since February?!?

[Sherlock]

I guess I have to deliver the 50 at least. My problem with DK is that I really do not know how many people/RMP I deliver. There was something like "conversions", but that were not RMP or something like that.

The affiliate aoftware of theirs is horrible.

[TheSpry]

They don't even update stats in the affiliate backend anymore. We rely on a daily email. LMFAO

[Sherlock]

I see that too now. Incredible. But at least I see regs/RMPs (no I am nowhere close to 50 RMP after NFL). And with this they want to expand into UK. With this they want to suck VC. They were worse than FD b4 and now it is a real joke.

[Sherlock]

From my TOS:

Furthermore, if an affiliate fails to acquire a minimum of 4 new real money players over a six month period, we reserve the right to terminate your account without notice.

[Sherlock]

So at least they have some consistency

> The new terms are being enforced, for all affiliates, as of 3/1/16.
> For all referrals you obtained prior to that date, the terms will not
> be applied retroactively.

It is another lesson. When some program has terms too good to be true (not that low player quota is too good to be true..)it is better to sign up asap.

[Sherlock]

Hello Partners, We are writing to inform you of an upcoming change that may effect your account. As you may be aware, our tracking is based on last touch attribution. For example, if a user clicks on multiple links in a day, the last one clicked will receive credit. It's come to our attention that in some cases, multiple sources were falsely receiving credit for a new user signup. As such, we will be going through and updating those users so only the last touch source is credited. This means you may see a decrease in total users signed up to your account. To be clear, you will retain all users properly signed up to your account and only users formerly attributed falsely will be removed. Any commissions earned previously for those signups will also be unaffected with no retroactive corrections. This only affected a small percentage of users, but as changes to correct it will effect your account we wanted to make you aware of it. If you have any question please let us know. Best Regards, The FanDuel Partners Team

Is it IA glitch or what?

[David_Allegro]

I remember hearing their TV and Radio advertising budgets last year and my jaw dropped to the floor. Between that and their payouts, I wondered how they could possibly be profitable. Now I see the truth, they weren't. Appreciate the poster putting this up.