DraftKings Raises $153 Million In Latest Round of Funding
The rollercoaster ride of DFS operators like DraftKings and FanDuel in the last few years is nothing short of spectacular. Up until about a year ago both companies were riding high and if anything too high. Their unprecedented success and marketing efforts in every media channel is what many believe got legislators looking into how non- gambling companies can be giving away millions of dollars in prize without being regulated in any way.
It is not an exaggeration to say that only a few months ago many would have bet on DFS collapsing in the U.S. as legal battle after legal battle seemed to plague the industry. The debate over whether DFS is skilled based or a game of chance just like gambling is at the core of the debate.
The tide now seems to be in favor of the DFS operators who have received welcome relief in key states like New York after Gov. Cuomo declared DFS a game of skill. Needless to say the hundreds of millions of dollars in funding that both DraftKings and FanDuel received in the past few years dried up as everyone was waiting for clarity on the legal status of DFS. The overall agreement is that DFS will be regulated in most states with operators required to pay license fees and implement checks and balances. The good news is that it seems that barring something extraordinary the DFS sector will bounce back but with a different working model.
As a sign of the stabilization of the DFS sector and confidence by investors, DraftKings have raised $153 million in a new round of funding from investors that include The Kraft Group and Accomplice. Also included are the venture capital firm Revolution Growth founded by co-founder of AOL Steve Case and Washington Wizards owner Ted Leonisis.
DraftKings’ co-founder Jason Robbins commented on the good news,” Revolution Growth is a tremendous new partner for DraftKings, with an entrepreneurial outlook and spirit of innovation that meshes perfectly with the culture of our company.”
It now remains to be seen if this is the beginning of the new DFS industry or just relief from the barrage of legal challenges being bought against them by legislators across the country.