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DraftKings raised $7 million to finance its expansion of daily fantasy sports online games.
The Boston company has cash-prize fantasy game competitions in baseball, football, basketball, and hockey. Atlas Venture led the round, which is a significant amount for a social sports betting company.
Jason Robins, the chief executive of DraftKings, said in an interview with GamesBeat that the company wants to make fantasy sports easier to play and convert the more than 35 million fantasy sports players in the U.S. to participate in social online fantasy sports leagues.
“This funding will help put us at the top of the heap,” Robins said. “We’ll build out our user experience and expand our marketing and distribution.”
In the past year, the company has launched six different sports leagues, and its user count has surpassed 100,000 registered players across the web and mobile devices. Robins said the games are for both seasoned and casual sports fans. Players have played over 500,000 matches and drafted over nine million fantasy sports players.
For the fantasy baseball season, DraftKings plans to award more than $20 million in cash prizes, including a current $5 million tournament. Users spend an average of three hours a week on the web site and play 2.6 different sports. The highest level of engagement comes during the actual games.
“We remain bullish on the daily fantasy sports market and believe DraftKings is poised to become the leader in this exciting segment of the sports market,” said Ryan Moore, the chief executive of Atlas Venture.
The company was founded in April 2012, and it has 18 employees. Rivals include FanDuel, DraftStreet, and DraftDay. DraftKings tries to outdo them with a clean user interface, more game features, and larger payouts. The No. 1 player has a record of 23,067 wins, 9,672 losses, and 791 ties. He has earned 7,097,209.941 fantasy points in matches and has a current coins balance of 1,207,756,033,162.
“We really have great traction,” Robins said. “And we feel there is huge potential. We are trying to redefine what fantasy sports means to a sports fan.”
DraftKings players can play with real-money betting on the company’s web site, but the Facebook, iOS, and Android versions use virtual currency betting, where players can put real money into the app but can’t cash out. With fantasy sports, U.S. law permits for real-money betting in games of skill. DraftKings enables players to play and win a season in just a day, or they can spread the competition out over time.