- Daily fantasy platform PrizePicks has obtained investment funding from a number of big name poker players.
- The funding will be used primarily for infrastructure improvement and staffing.
- The company hopes to transition into sports betting down the road as DraftKings and Fan Duel have done.
You can thank me for not doing a cheesy pun in this headline like ‘Poker players ante up for DFS site’. Daily fantasy sports provider PrizePicks has announced that they’ve closed an investment round by a group that includes some big names from the world of poker.
Principals from poker websites Poker Central and PokerGo have joined the investment team that already included Poker Hall of Famers Phil Hellmuth and Jack McLelland, streamer Jeff Gross and Poker Royalty founder Brian Balsbaugh.
CEO Adam Wexler couldn’t resist making a poker pun in his comments on the investment round:
“Our cap table has become a final table. We couldn’t be more confident in the way we’re positioned strategically for 2021 and beyond and that’s in large part due to how we’ve chosen to align with a diverse set of equity investors rather than a strict venture financing path.”
“This gives us a lot of flexibility for the future should we choose to expand our brand beyond DFS as FanDuel and DraftKings have. The alignment with the poker industry and these stellar investors will benefit both sides in both the short term and the long should we move into areas such as sports betting and icasino.”
I can pretty much guarantee that PrizePicks will try to expand into sports betting as soon as feasible. Given what we’ve seen this week about sports betting companies realizing the synergy with daily fantasy sports it would be silly if they didn’t. They can work the same angle as Caesars and Bally’s–use the reach of daily fantasy sports (28 states in PrizePicks’ case) to establish brand identity and pivot into sports betting when the opportunity presents itself.
And speaking of pivot….not all of PrizePicks’ investors are poker players. One of the other high profile backers is former NBA center Andrew Bogut (see what I did there?) and he couldn’t resist making a tortured comparison to his run with the Golden State Warriors:
“While sports fans are overly focused on the public companies in this category, it’s the emerging groups doing things a bit differently who can shake things up and win over time”.
“It reminds me of how we built it in Golden State – smart, strategic moves to build a highly complementary group who could reinvent the way championships are achieved.”
PrizePicks’ format reduces daily fantasy sports down to what is essentially a player prop bet parlay. Gone are the competitions against other players or restrictions such as salary caps. You pick players’ stats over or under–you have to do multiple players as not to run afoul of gaming regulations and to at least give it a veneer of similarity to traditional DFS–and your predictions are graded accordingly:
There’s definitely room for all sorts of different business models in this industry just as in sports betting. PrizePicks’ single player format is similar to that of Monkey Knife Fight–the DFS platform purchased by Bally’s earlier this week.