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DraftKings Is Adding a New Fantasy Sports Option: Competitive Video Gaming

DraftKings is getting into eSports.

Rob Stothard / Getty Images

DraftKings wants to be involved in all the sports, even the ones played from your living room.

Beginning next month, the daily fantasy site is adding competitive video gaming — commonly referred to as eSports — to its list of fantasy offerings. That means you can draft a team of professional gamers and compete head to head or in a group against others online for real money, the same way you can compete on the site in more traditional fantasy sports like football and baseball.

There’s one very good reason for DraftKings to get into this aspect of fantasy play: eSports has a massive audience. Market research company SuperData estimates that 134 million people around the world watch eSports and that the industry generates more than $600 million in annual revenue. That’s a lot of potential DraftKings users.

The major downside is that eSports is most popular in Asia, which generates over 60 percent of the industry’s revenue. Right now, DraftKings only operates in the United States and Canada, which means that the bulk of eSports fans won’t be able to play. At least not yet.

“We certainly have global ambitions here and want to be operating in as many countries as possible and as quickly as possible,” DraftKings Chief Revenue Officer Matt Kalish told Re/code. “The long game here is really tied in more with our international strategy.”

DraftKings is launching its eSports offering alongside the annual League of Legends World Championship which begins in October. (For a taste of how serious these gaming competitions can be, check out this ESPN article from June.) DraftKings also agreed to partnerships with six different eSports teams, partnerships that are similar to the paid deals the company signed with major sports franchises from the NFL and MLB, said Kalish. Sports management company IMG brokered all the deals.

DraftKings has the money for these deals thanks in part to a recent $300 million funding round it took from a slew of investors, including Fox Sports. At the time, CEO Jason Robins told Re/code that acquiring new users was his top priority for the money. Expanding into eSports — in addition to a boatload of advertising you really can’t avoid — is meant to accomplish just that.

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