MLSE signs four-year promotions deal with daily fantasy provider DraftKings

TORONTO — Daily fantasy website DraftKings has signed a four-year advertising and promotion deal with Maple Leaf Sports and Entertainment, owner of the Toronto Raptors and Toronto Maple Leafs.

The fantasy provider has partnerships with nearly every major sports league in North America and is known for its ubiquitous advertising campaign that has come to dominate sports broadcasts over the past year.

DraftKings says the deal means successful players will be able to win special experiences with MLSE’s three pro teams, such as box seats at the Air Canada Centre, a chance to go behind-the-scenes with the Maple Leafs, or court access for pre-game warm-ups at a Raptors game.

DraftKings players pay to assemble virtual teams of professional sports stars for a single day to compete for prizes and awards that can range up to $1 million or more.

The Fantasy Sports Trade Association says more than 57 million people in the U.S. and Canada will play daily fantasy sports in 2015.

Unlike most other fantasy sports products, in which players draft their pros at the beginning of the season and play every week with the same roster, sites like DraftKings and its biggest rival FanDuel give their players the chance at a new lineup every day.

DraftKings vice-president of business development Jeremy Elbaum says Canada is an untapped market for the company, and that this deal is the first in a series of planned expansions outside the United States.

“It wouldn’t warrant a deal like this if we weren’t already seeing some good results from people signing up in the Toronto area,” he said.

Elbaum said the company is putting most of the money it has raised from investors, including venture capital firms, Fox Sports and the National Hockey League, towards advertising as it seeks to gain new customers.

The company has yet to turn a profit, yet Elbaum said the business model is sound.

“We have a direct revenue stream that comes in every single day, we just are choosing to continue on this high-growth pattern,” he said.

According to ad researcher iSpot.tv, both DraftKings and FanDuel have been in the top 10 in American TV advertising spending since the NFL season began in early September.

MLSE chief commercial officer David Hopkinson said the company plans to build a new “interacitve zone” at the Air Canada Centre to give fans access to set their lineups and play DraftKings fantasy in the arena.

DraftKings and other daily fantasy providers have come under fire in other jurisdictions from those who claim fantasy sports should be regulated like gambling.

Hopkinson said the company was confident that DraftKings doesn’t meet the legal definition of gambling and that fantasy sports are a great way to get fans more involved in the game and interested in individual players.

“We’ve certainly done our homework,” he said. “This market is still going to grow in Canada. I don’t think it’s anywhere near what it’s going to become.”

Lawyer Chad Finkelstein, an expert on Canada’s gambling laws, said those who sign up for DraftKings or other paid daily fantasy sites won’t face any negative consequences, but those who offer fantasy sports need to prove their products aren’t the games of chance that fall under strict regulation in the criminal code.

“I’m sure they’ve gotten legal opinions, they’ve passed that threshold for MLSE to have signed this deal,” he said.

In the United States, online fantasy operates under an exemption in the federal law regulating online gambling.

Canada has no law that deals with online gambling, and the Criminal Code places most of the restrictions on games of pure chance, with lesser restriction on games that mix chance and skill.

Finkelstein said he’s a big NBA fan and plays fantasy basketball every year, but added that following every bit of league and player news still doesn’t translate to a winning fantasy record.

“When I draft on paper I’m always really happy, but trades happen, injuries happen, suspensions happen and bad weather happens,” he said. “To me, that’s luck.”

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Peter Henderson, The Canadian Press