The number of people playing daily fantasy sports games has been skyrocketing over the last few years. According to the Fantasy Sports Trade Association, there are 59 million players in the US and Canada, and the market is estimated to be worth more than $7 billion a year.
So as with almost every other business right now, it is natural that startups are looking at how to leverage blockchain technology to either replace what exists, or optimize it.
Today, MyDFS — a blockchain-based daily fantasy sports platform — has announced that the tokens that power its platform are now available for sale. But what makes blockchain a better technology for this particular industry, and why is a token-based platform needed in the first place?
“The first major problem facing fantasy sports is a lack of transparency,” Viktor Mangazeev, CEO at MyDFS told me. “Even among the largest companies in the industry, we don’t know how the software operates because they are closed, proprietary systems that we’re not allowed to investigate. Therefore, it’s easy for rumors to occur about insider gaming, bot-assisted play, or the manipulation of game statistics which can cast doubt on the entire operation.”
Those issues are something John Oliver famously lambasted in 2015 after a study showed that 91 percent of all profits won went to just 1.3 percent of daily fantasy sports sites players. That same study showed that 85 percent of all players were losers.
Mangazeev is betting on blockchain being the solution to providing the transparency needed.
“Our platform embraces transparency and fair play, Mangazeev said. “Our cryptocurrency tokens eliminate the need for fiat currency. The accuracy of our fantasy results is backed up by smart contract technology. The real-world game data that determines how players on our platform do, along with players, teams and statistics, are completely publicly accessible.”
Transparency isn’t the only issue with the current fantasy sports landscape. Those people that do win can have issues seeing the fruits of their virtual labor.
“The financial infrastructure that serves the fantasy industry doesn’t make it easy to get winnings to players,” Mangazeev said. “It might take two weeks for your check to show up in the mail after you win your league. In 2016, Vantiv, the largest credit and debit card processing company in the United States, issued a statement and walked away from FanDuel and DraftKings. Imagine people having money on their balance and being unable to withdraw it, making it feel like their money doesn’t belong to them anymore. The blockchain solves these problems elegantly, because it is a decentralized platform. There are no middlemen here who might simply decide to skip out on delivering your money.”
MyDFS currently offers soccer, ice hockey, basketball and football leagues. The app is available on iOS and Android smartphones and tablets, and players can also get their game on via the website. Created by the founders of uTrener — one of the first daily fantasy sports platforms to launch in the Eastern European market — MyDFS has a distinctly European focus at the moment. That is set to change soon.
“Currently, we operate mostly in Europe,” Mangazeev said. “We support popular sports like soccer and hockey, and we also plan to integrate American football, MLA tennis and boxing. Our app will be available ahead of the 2018 FIFA World Cup this summer in Russia, one of the world’s biggest sports events, which will be a great way to attract new fans and users and create a memorable experience.”
Interestingly, the platform itself incorporates functionality you’d normally see in social trading apps like eToro.
“We’ve added new functionality to the game,” Mangazeev said. “Our fantasy brokerage lets you invest in lineups picked by ‘professional’ fantasy players, and you get a share of any winnings they earn. So, you can still win. even if you’re reading financial newspapers rather than sports news.”