WASHINGTON, July 9, 2015 – Yahoo is hoping to cash in on the hugely popular world of fantasy sports by expanding its fantasy offering, and allowing users to wager with real money.
Yahoo announced yesterday that it will now allow users to participate in daily and weekly games, rather than season-long contests.
Access is through a mobile app, an area where Yahoo has focused over the last several years.
Initially, Yahoo will focus on Major League Baseball, currently in season, and will add sports as their seasons start. Winners will receive as much as $50,000.
Yahoo’s announcement came just a day after ESPN said it will “fully integrate” fantasy content with NFL games next season. The company made the announcement at the Fantasy Sports Trade Association conference in New York, and also said it will step-up daily fantasy sports (DFS, for short) due to high demand.
ESPN also has an exclusive agreement with online fantasy sports king DraftKings (www.draftkings.com) which offers daily contests for “real cash prizes.”
Fanduel, another online fantasy site, also offers daily games and cash prizes. The company reported that it earned $8.9 million in sales for the three months that ended in September 2014, three times revenue for the same three months the previous year.
The move by Yahoo is an effort to revive its flagging brand and bring in new, younger users.
Fantasy sports is one of the fastest-growing segments of sports. More than 56 million in the United States and Canada participate in fantasy games, an increase of 40 percent from the previous year, according to the Fantasy Sports Trade Association. They spend more than $1.7 billion a year in league fees, according to the trade association.
Fantasy sports participants create a team from existing football, basketball, baseball or other sports rosters and “manage” the team, deciding who will start in each position and who will be benched. They then acquire points for their compiled team based on the performance of the real athletes, and compete against other fantasy teams.
Fantasy sports are exempt from the Unlawful Internet Gambling Enforcement Act of 2006. That act “prohibits gambling businesses from knowingly accepting payments in connection with the participation of another person in a bet or wager that involves the use of the Internet and that is unlawful under any federal or state law.” Legal intrastate gambling and tribal gaming are also excluded from the Act. The logic behind excluding fantasy sports is that it involves analysis of players and match ups rather than pure chance.
However, some states still do not allow online betting involving fantasy sports. Arizona, Iowa, Louisiana, Montana and Washington do not allow on-line gambling involving fantasy sports.