Are you ready for some football! As the NFL gets ready to kickoff this Thursday in Denver, you’d better bet the people at FanDuel are ready and rearing to go.
The humungous daily fantasy site has had a pretty tumultuous upbringing and is now ranked among New York's largest tech startups, valued at over $1 billion, with offices around the world. Of course, it’s taken some big bets along the way for the company to get where it is today.
You can trace FanDuel back to early 2008, with the founding of another company called Hubdub. That company was a web-based prediction market game company where people were allowed to use virtual money to trade predictions on future events — be it sports or politics or tech. The platform would track people’s predictions over time, and rate individuals based on their knowledge and expertise of various categories. But, as cool as all that sounds, the team behind Hubdub took a different route, launching FanDuel in 2009.
In 2010, the first FanDuel Fantasy Football Championship was played by just 10 users who were entered into the contest after winning a qualifying fantasy football league. The winner of that first matchup won just $25,000 — not small money, but a far cry from today’s massive payouts. The concept behind FanDuel proved popular, and Hubdub closed their doors.
FanDuel weathered the NBA and NFL lockouts of 2011, and by 2013, they had pulled in an $11 million Series C that included Comcast Ventures. Just one year later, the company pulled in a massive $70 million Series D.
In May of 2015, FanDuel managed to acquire Zynga Sport 365’s entire development team in Orlando. 38 former employees of Zynga, along with the company’s former vice president, moved over to FanDuel and opened a new Florida office. This happened to coincide with large layoffs and upheaval at the once high-flying Zynga.
As well as things seemed to be going, it was not all was smooth sailing ahead for FanDuel either.
In most states, fantasy sports are considered to be games of skill, rather than games of chance, meaning they are not considered gambling — and are legal. But, a number of states have taken a different view, and in early 2016 FanDuel was ordered to stop operating in their home state of New York.
This ban proved short-lived, however, and Governor Cuomo signed legislation allowing the company to operate last month, just in time for this year’s NFL season. Still, the road ahead for FanDuel and other daily fantasy sites is not clear, and today, you cannot play FanDuel in Alabama, Arizona, Delaware, Hawaii, Idaho, Iowa, Louisiana, Montana, Nevada, Texas or Washington.
Only time will tell what the future holds for daily fantasy sites, but the $4 million they're expected to raise for the New York State's education funds means that at least there's an incentive to keep them legal.
In the meantime, enjoy the game while you can, and good luck — you're gonna need it.
Have a news tip for us or know of a company that deserves coverage? Let us know or tweet us @builtinnewyork.
