DraftKings eSports Launches: How Does it Work?

Posted By admin on September 23, 2015 - Last Updated on January 22, 2018

DraftKings, an industry-leading daily fantasy sports operator, has entered a new market that some likely viewed as too niche for the company to get involved with: daily fantasy eSports.

Although DraftKings is now certainly the largest fantasy sports operator to be involved with eSports, they aren’t the first. At least two other companies, AlphaDraft and Vulcun, have existing products which offer real-money daily fantasy eSports contests. Both of those operators focus on eSports specifically and do not have products dealing with traditional physical sports.

The launch of DraftKings eSports will coincide with the 2015 League of Legends World Championships on October 1st. 

Initially, the only eSport available on DraftKings will be League of Legends (LoL), although it is almost certain that the company will venture into other games soon thereafter. AlphaDraft currently boasts the widest array of available eSports: League of Legends, Counter-Strike: Global Offensive, Dota 2, Smite, and Hearthstone.

From a business perspective, one unique positive that eSports brings to the table is that it isn’t seasonal. A football fan may only be a customer for a daily fantasy operator for half of the year, but an eSports fan is potentially engaged throughout the entire year.

How do daily fantasy contests translate to eSports?

The manner in which daily fantasy contests take place in traditional sports is simple for a widespread audience to understand. Participants draft a team of players and the statistics that those players generate during sporting events earn points for the participant. The teams are ranked by the amount of points they earned, and prizes are awarded accordingly.

Although it may not be obvious to those unfamiliar with eSports, but there are enough statistics involved with most games that the DFS formula doesn’t need to change much to adapt.

DraftKings has already revealed the scoring system and rules for League of Legends contests. The following general rules apply:

  • Players will have a $50,000 salary cap to draft their team.
  • Teams consist of eight players, one of which is a real-world LoL team. Your choice of team is functionally similar to picking a defense in an NFL contest.
  • You can choose a maximum of 4 players from a single League of Legends team, and rosters must span at least 2 unique games.
  • In-game statistics including Kills, Deaths, Assists, and Creeps determine the points each of your players earn.
  • A different set of in-game statistics determine how many points your LoL team choice earns.
  • At the end of a contest, teams are ranked and prizes are awarded in the same manner as typical daily fantasy contests.

Each additional game that any fantasy eSports operator gets involved with requires its own scoring system in the same way that basketball and baseball must be scored differently. Fans of each eSport will already be familiar with these statistics for the games they follow.

Are FanDuel and others next?

Although we have no direct knowledge that FanDuel, DraftKings’ biggest competitor in the traditional daily fantasy sports market, or other major players in fantasy sports are interested in eSports, the recent increases in their popularity both on eSports-specific channels like Twitch and in mainstream media may be tough to ignore.

On top of that, the cost of getting involved would be relatively minimal for FanDuel specifically. This is a company that spends incredible amounts of money trying to keep up with the flood of advertising spots that DraftKings purchases, so money for software expansion is very unlikely to be an issue.

The cost of developing an in-house solution to begin offering daily fantasy eSports contests or reaching a deal to either acquire or white label AlphaDraft or Vulcun would seem fairly minimal for FanDuel compared to its potential upside. If they do get involved, it will be extremely interesting to see how aggressively the different competing operators will market their eSports products.

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