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Yahoo Begins Offering Daily Fantasy Sports Games With Cash Prizes Available

Yahoo Sports has launched its own set of daily fantasy games, fulfilling plans previously disclosed in an earnings report in April and placing the company in direct competition against established daily fantasy leaders FanDuel and DraftKings. Like those rivals, Yahoo Sports Daily Fantasy will offer cash prizes for one-day and one-week fantasy games, beginning immediately with play around MLB games. The move shifts Yahoo Sports, for many years a large-scale player in traditional fantasy sports, to the role of the underdog in the space. But Yahoo is clearly betting its broad digital reach and ability to market directly to its existing fantasy audience will prompt significant shifts in current daily fantasy market share. “The growing popularity of daily fantasy games is a fantastic opportunity for us to bolster our leadership by providing our millions of existing fantasy users as well as new fans out there with a unique take on this game genre," Yahoo Senior VP/Publisher Products Simon Khalaf said. Like other daily fantasy operators, Yahoo will not offer cash prizes to residents of Arizona, Iowa, Louisiana, Montana, and Washington state, as laws there do not currently permit it (Eric Fisher, Staff Writer). In San Jose, Matt O'Brien notes after debuting with MLB, Yahoo will "add football, hockey and basketball when those professional seasons begin" (SAN JOSE MERCURY NEWS, 7/9).

START ME UP: In N.Y., Goel & Drape note the fantasy sports industry "has been growing rapidly," but none of the companies like DraftKings and FanDuel, both start-ups, have the "vast reach of Yahoo and the ability to entice tens of millions of young men -- a coveted audience -- to bet on the performance of their favorite players." Yahoo’s move "further legitimizes a pastime that closely resembles gambling." In addition to revenue from entry fees, Yahoo "might sell sponsorships or ads around the contests." The company is "initially offering $6,500 cash prizes in some games that are free to enter." It is also "guaranteeing to pay prizes in some games, even if too few players pay the entry fee to cover the pot." For now, Yahoo is offering the daily fantasy games just in the U.S., playable on desktop computers, a mobile website or an iPhone app (N.Y. TIMES, 7/9). Meanwhile, the WALL STREET JOURNAL's Douglas MacMillan notes the app design for Yahoo "drew criticism" from FanDuel COO & co-Founder Nigel Eccles. He wrote in an e-mail, "When we heard that Yahoo was joining the daily fantasy space we expected something new and exciting that could affect the industry. Now to see that they’ve spent the last six months cloning FanDuel’s product -- pixel for pixel -- is totally flattering, but also slightly disappointing" (WALL STREET JOURNAL, 7/9).

KING ME: ADWEEK's Andrew McMains reported DraftKings is searching for an agency that can "raise the tone and stature of its advertising," and "fresh from a category exclusive advertising deal with Disney's ESPN, DraftKings has told shops participating in the search that the brand will be supported" by $200M in media. A source said the company's current approach is "a little bit sophomoric, a little bit frat boyish." A handful of agencies are "scheduled to make presentations later this week" at DraftKings' Boston HQ. Sources "identified the finalists" as BBDO, N.Y.; The Martin Agency, Richmond; Arnold Worldwide, Boston; Wieden+Kennedy, N.Y.; and Butler, Shine, Stern & Partners, California. The winner "will succeed Havas Edge, a direct-response shop" (ADWEEK.com, 7/8).

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