Big companies are starting to see a lot of potential to make money in esports.

A day after DraftKings announced it’s expanding into esports next month with daily-fantasy games for League of Legends, competitor FanDuel is doing the same through an acquisition. The company has purchased the daily-fantasy startup AlphaDraft, which debuted earlier this year to provide a FanDuel-like experience for multiplayer online arena battlers and shooters. We’ve heard rumors of this acquisition for a few weeks — although AlphaDraft was also hearing offers from Yahoo Fantasy and even DraftKings.

Fantasy sports is a multibillion-dollar business, and daily fantasy is pushing that revenue to record highs. At the same time, the popularity of pro gaming is on the rise — and so are its earnings. FanDuel and DraftKings obviously both see this as an opportunity to get in on the ground level of what could turn into a mammoth industry over the next decade.

As we pointed out in our story yesterday about DraftKings’ esports ambitions, this acquisition by FanDuel is likely a move to ensure its revenues have a market that it can grow into.

Traditional sports are massively popular right now — professional football in particular has probably never had the level of engagement that it has today. But concerns around the safety of contact sports, along with a generation of parents who are trying to grind their children into superstar with the 10,000-hour rule, has youth participation in sports like football, soccer, and basketball noticeably falling off.

If research keeps revealing that football and other physical activities will lead to brain disease, interest in these sports could erode with the participation levels over the next 10 to 20 years. And that’s where the rise of esports could make up the difference.

Tens of millions of people have tuned in to watch events like the finals for Counter-Strike, Dota 2, and League of Legends. Every competitive-gaming genre is seeing year-over-year growth in terms of viewership. Marketers and sponsors have already taken notice, and that has the esports business on a trajectory to reach more than $465 million in revenue by 2017. But fantasy esports could have the potential to push this market to $1 billion and well beyond.

DraftKings is a US based skill games company, and all of our contests are operated 100% legally. We offer Daily and Weekly Fantasy Sports contests for cash prizes in all of the major sports:... All DraftKings news »

Track DraftKings's Landscape to stay on top of the industry. Access the entire ecosystem, track innovation & deals. Learn more.

FanDuel is the industry leader in one day fantasy sports. We specialize in one day leagues for fantasy football, baseball, basketball, hockey, college football, and college basketball for re... All FanDuel news »

Track FanDuel's Landscape to stay on top of the industry. Access the entire ecosystem, track innovation & deals. Learn more.

AlphaDraft is a daily fantasy game for eSports. We provide daily/weekly fantasy eSports contests for cash and prizes. On AlphaDraft you can draft a team every day. There are no season long c... All AlphaDraft news »

Track AlphaDraft's Landscape to stay on top of the industry. Access the entire ecosystem, track innovation & deals. Learn more.

Todd Peterson is the founder and CEO of AlphaDraft, an online platform which seamlessly blends the highly popular worlds of eSports, live streaming and fantasy sports betting. AlphaDraft fan... All Todd Peterson news »

Track Todd Peterson's Landscape to stay on top of the industry. Access the entire ecosystem, track innovation & deals. Learn more.