Just How Big is Daily Fantasy Sports: Researchers, Numbers Crunchers Reveal All

Written by:
Thomas Somach
Published on:
Just How Big is Daily Fantasy Sports: Researchers, Numbers Crunchers Reveal All

ANAHEIM, Calif. -- There's an explosion of fantasy sports leagues in the USA right now, and with that explosion comes the need to track the trends that fuel it.

That's where Eilers Research, LLC comes in.  (They will be appearing at the first ever Daily Fantasy Sports Expo in Miami Beach this August 6-7, 2015.)

The California-based research company, located just down the road from Disneyland, has been crunching the numbers and doing the math for all things related to sports fantasy in an effort to determine not only where the industry is but where it's going.

Adam Krejcik, a partner at the company, will be a featured guest speaker at the upcoming fantasy sports expo in Miami in August.

Gambling 911 earlier this week traveled to the Left Coast to visit Krejcik at Eilers headquarters and ask him about his company, the sports fantasy industry and what he's going to talk about at the expo.

Here is a transcript of that interview:

Gambling 911: Tell us something about yourself and your company. What is your background? How did the company get started and what does your company do?

Adam Krejcik: I’ve been working on Wall Street for over 10 years now following online consumer entertainment industries for various investment banks. In late 2012, my current business partner, Todd Eilers, started Eilers Research, LLC and shortly thereafter I joined up with him to head up the firm's digital and interactive gaming efforts. The idea behind Eilers Research, LLC was to become the leading experts in the gaming and technology sector. Todd is largely concentrated on the traditional gaming industry with a heavy focus on the gaming equipment suppliers, while I’m in charge of all things related to online gaming including social and mobile gaming, igaming and daily fantasy sports. I believe our skill-sets, background and extensive relationships across the gaming industry have quickly turned us into one of the leading market and equity research firms. More recently, we have also been getting involved on the consulting and advisory side.  

G9: What kind of research does your company do in connection with fantasy sports?

AK: In 2014, we published an in-depth white paper on the daily fantasy sports market titled 'Daily Fantasy Sports: the Future of U.S. Sports Wagering?' whereby we highlighted business model, market size, competitive landscape, fundraising activity, key trends and our bold predictions about the future of the daily fantasy sports industry. In early 2015, we were invited  to be the keynote speaker at the annual Fantasy Sports Trade Association (FSTA) Winter Conference, where we highlighted our bold predictions about the future of the daily fantasy sports industry in a 38-page slide presentation. We have also started to publish a Daily Fantasy Sports Tracker, which is released at least once a quarter and highlights current news, our latest market size projections and valuation analysis.

G9: What are some of the things you have learned, through your research, about fantasy sports?

AK: There are a lot of interesting parallels between daily fantasy sports and the online poker industry. I think many important lessons can be learned from studying the online poker market as well as the sports betting industry. It’s also no coincidence that a number of executives from the daily fantasy sports world have a background or overlap with the igaming industry.

G9: Who hires you to research fantasy sports and what kind of information specifically are they seeking?

AK: Our firm's client base consists of institutional investors and corporate clients. Investors include hedge funds, mutual funds, private equity and venture capitalists, while corporate clients include large publicly traded companies to start-ups. We have a pretty diverse group of clients who subscribe to our research.

G9: What does your research tell you about the expected future growth of daily fantasy sports?

AK: Generally speaking we are quite bullish on the prospects for the daily fantasy sports market, while revenues are still quite modest. User growth, retention, LTV and other KPIs have all been very encouraging. We predict total entry fees across the entire daily fantasy sports industry will surpass $14 billion, which is up from just $1 billion.

G9: I understand your projections on growth are not as positive as those of the FSTA. Why the discrepancy?

AK: I believe the FSTA’s projections include the entire fantasy sports market, while we are just concentrated on daily fantasy sports. So I can’t really speak to their estimates, but we spent a lot of time formulating our projections and are constantly revising our models with the latest data and news.

G9: What kind of research does your company do other than involving fantasy sports?

AK: We are  focused on servicing the gaming equipment, technology and interactive gaming sectors within the global gaming industry.

G9: How many people in the USA play fantasy sports now? In the world? How do you see those numbers a year from now? Five years from now? Ten years from now?

AK: Per the latest FSTA survey, there are 41.5 million fantasy players in North America. We estimate that there are roughly one million unique daily fantasy sports players in North America and are projecting that number to more than double next year.

G9: What do you plan to speak about at the fantasy sports expo in Miami in August?

AK: I will be speaking on the state of the daily fantasy sports industry. In particular, I will cover the current competitive landscape and provide an overview of our latest market-sizing projections. I will also discuss key trends and fundraising activity and give an update on some of the bold predictions we laid out at the FSTA Winter Conference.

By Tom Somach

Gambling911.com Staff Writer


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