Yahoo daily fantasy sports closing the gap on market leaders?

Amid the furore over regulation and legal issues surrounding the daily fantasy sports vertical this week the San Francisco Chronicle suggested that Yahoo’s DFS enterprise is starting to close the gap with market leaders DraftKings and FanDuel…all without spending the mega bucks the two leaders have splashed out on marketing and advertising.

The newspaper quotes analyst numbers that have predicted the DFS market will generate $3.7 billion in revenue by the end of this year, and reports that Yahoo could win in the end due to its long-established brand name and domination of the overall fantasy sports market.

“Yahoo might be in a better position today than they were before the scandal broke out,” New York specialist gaming attorney Marc Edelman told the Chronicle.

Yahoo only launched its daily fantasy games in July, and a company spokesman said it doesn’t publicly break out revenue for the category. However, the Chronicle claims that on October 4, Yahoo became the first company other than DraftKings and FanDuel to generate – at more than $1.31 million – more in entry fees than the $1.29 million in prizes awarded.

Independent industry monitor SuperLobby.com said that last Sunday as the row over DFS continued to rage, that Yahoo fees declined to $1.17 million but still equalled the next five competitors combined.

By comparison, DraftKings led the pack with $22.9 million, and FanDuel was second at $19.9 million, illustrating that Yahoo still has a mountain to climb to reach parity.

The newspaper reveals that Yahoo’s traditional fantasy sports business can boast 56.8 million players in the US and Canada, and that according to research firm IBIS World, the internet giant will generate $272.8 million in fantasy revenues, largely from advertising, this year and leads the pack with an 18 percent market share.

“Yahoo has the brand and all the users that FanDuel and DraftKings are advertising to,” said Jerry Shen, a former Yahoo fantasy sports manager who spearheaded the company’s daily fantasy project.

Last week Yahoo expanded its list of five states where it will not offer services due to specific state laws to include Nevada and Florida pending further review.

“Yahoo believes that its contests are lawful and we will continue to assess the legal environment for DFS while providing a compelling fantasy sports experience for all of our users,” the company pledged in a statement. “Our decision today does not impact users in other states.”

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