Just days after it revealed that it had secured a new sponsorship deal with Major League Baseball, online fantasy sports betting firm DraftKings revealed that it has secured a $250 million investment from Walt Disney and their subsidiary ESPN.
DraftKings announced the move this week, noting that it plans to utilize the investment to leverage a very ambitious marketing plan that will see it spending more than $500 million on ESPN advertising over the next several years.
Daily Fantasy Sports sites have prospered in the last year or so in America, where sportsbetting is heavily restricted or illegal. The premise works by having a player enter a competition wherein he drafts a sports team for a particular league. Using a set amount of cash, the player builds the best roster he can, and is rewarded if those athletes perform and he ends up beating the fellow competition. Currently there are two major players in the United States for this business, DraftKings and FanDuel, which also just saw a huge investment by telecommunications firm Comcast.
With the investment DraftKings now boasts a valuation of more than $900 million. The company says that players spent $300 million on fees alone last year, and will pay out more than $1 billion in prizes this year.