July 22, 2013

Living the dream with daily fantasy sports

Companies aim to take short-term and small buy-in competitions to mainstream sports fans.

By PARESH DAVE/Los Angeles Times

On some days, Christopher Batsche can walk away with hundreds of dollars with a $2 buy-in. But he's not heading to casinos and he isn't playing online poker.

Daily fantasy sports emerge as instant-gratification alternative
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David Geller, center, left Yahoo’s fantasy sports division a year ago and recently started TopLine Game Labs, which offers short-term fantasy sports competitions.

The Associated Press

Instead, the 27-year-old from Cincinnati goes to a website before the day's Major League Baseball games begin and picks players he expects will hit and pitch better than players selected by other bettors. When the players do well in the real games, Batsche, who pays $2 to play, can win as much as $700.

Batsche is taking part in a new form of fantasy sports that is rapidly growing in popularity. Unlike traditional fantasy sports, in which gamers select a set of players before the sports season begins and then must wait until the season is over to collect, bettors such as Batsche can choose players and bet every day. The payback, if any, is immediate rather than months later.

"I do some research on my breaks at work, then spend a couple of hours after work researching, and then I tune in to podcasts or videos discussing the day's action," he said.

The daily fantasy league has been gaining traction with avid fantasy sports players -- the kinds of fans willing to spend time posting to online forums and listening to sports talk shows on the radio.

Now the industry is set to go mainstream, moving from the world of Wall Street traders, Las Vegas regulars and college students to more casual fans of sports and entertainment.

Recently, a fledgling Los Angeles firm that's led by a big name from the fantasy sports industry received a $25 million investment. TopLine Game Labs is creating short-term games that are appealing to a wide audience. It enters an industry with dozens of competitors.

After the federal government shut down illegal online poker websites in 2011, daily fantasy sports emerged as an instant-gratification alternative for many Internet bettors.

Its own legal status is unclear. Although payouts for fantasy sports are legal under a 2006 federal law, daily games didn't exist then, so they weren't considered. Signaling a lucrative market, Cantor Ventures' financing of TopLine was at least the fifth major investment in the daily games industry this year.

"This was a slam-dunk opportunity to get involved in something at just the beginning of its life cycle," Cantor Ventures director Jed Kleckner said.

TopLine Game Labs' first service, a weekly fantasy football game, should launch by fall. David Geller, the head of Yahoo's wildly successful fantasy sports division until a year ago, founded the company.

"One of the things we saw at Yahoo is that in the season-long games, 50 percent to 60 percent of the audience is no longer in contention by midseason," Geller said. "Traffic starts to dip, and interest starts to wane."

Daily and weekly games are designed to keep people hooked 365 days a year.

Geller said TopLine would differentiate itself by creating a technology platform that can host games for sports around the world. He also wants to dip into other topics, such as reality shows, industry award shows and stocks. The games would be available across desktop and mobile devices, though the company will have a mobile-first philosophy.

"If you have a few minutes waiting for someone, you might as well pull up the app and make a prediction on a topic of interest," Geller said.

(Continued on page 2)

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