It’s a fairly new company in a fairly new industry, so the question is fair: Is DraftKings legit and safe?
Let’s put it this way:
They have over a million users on their site, ownership that includes the likes of Major League Baseball, and they have a valuation estimated last year at $1.2 billion.
Yes, DraftKings is legit.
Unlike online sports books and the shady online poker sites from a few years ago, DraftKings is headquartered in the United States – Boston to be more specific. The company was founded in 2012 by three Boston-area buddies who built the company up from one of the founders’ homes.
Also unlike the poker days, you can legally deposit money on DraftKings using a Visa or MasterCard. And withdrawals are quick and easy. Make your own call of course, but a million American players seem to think their money is safe on DraftKings.
(Side note: if you sign up on DraftKings using the promo code: GJ100, you’ll receive entry into a $3 buy-in tournament free of charge. I have to disclose that I am an approved DraftKings affiliate and will receive a commission from them if your use the DraftKings promo code GJ100).
Is DraftKings Safe?
First off, in case you were wondering, playing daily fantasy sports online for real money on sites like DraftKings is legal, per a special cave-out exemption in the 2006 UIEGA bill passed by Congress and signed by President Bush. (Go here to read more about how DraftKings is legal)
What this means is that not only is it legal, playing on DraftKings is much safer than depositing on an offshore sportsbook or poker site.
One of the two big dogs in the daily fantasy sports game (FanDuel being the other), DraftKings is quickly giving FanDuel.com a run for its money as the busiest daily fantasy sports site. (DraftKings says it has surpassed FanDuel in terms of player volume).
On top of guaranteed prize pools such as the $2 million given away for first place during week one of the 2015 NFL season, DraftKings is expected to give away over $1 billion in total prize money in 2015.
Money doesn’t equate to legitimacy of course, but it helps. To that end, DraftKings has earned the confidence of entities ranging from billion dollar venture capital firms, to the UFC.
In fact, on July 27, 2015, DraftKings received a $300 million round of funding, according to the Wall Street Journal. Investors who contributed to this $300 million, and who are now part-owners of the site, include Fox Sports, which now owns an 11% share in the company. Other investors into DraftKings include the National Hockey League, the aforementioned Major League Baseball, and the Kraft Group (i.e. the group led by Patriot’s owner Robert Kraft).
DraftKings has marketing partnerships with Major League Baseball, the NHL, UFC, NASCAR and a wide variety of individual professional sports franchises.
These include marketing partnerships with 27 different MLB teams, 8 NBA teams, 7 NHL teams, and 5 NFL teams, including the Denver Broncos, Pittsburgh Steelers, New England Patriots (Pat’s owner Robert Kraft is a part-owner of DraftKings), the Pittsburgh Steelers, and New York Giants.
As an industry leader, DraftKings has bought out smaller competitors like DraftStreet and StarStreet. They have also set themselves up for future success by inking a quarter billion dollar deal with ESPN that will have DraftKings as the exclusive daily fantasy sports advertiser on all ESPN channels in 2016.
Speaking of which…
DraftKings TV Ads
According to the legalsportsreport.com website, DraftKings was the number one television advertiser during the first week of September 2015.
Not the number one daily fantasy sports advertiser. The number one advertiser of any company in the United States. They spent just over $24 million in television ads during that week, which was more than companies like Geico and Ford.
Just spending money on TV ads doesn’t make you legitimate of course. I’m sure companies like Worldcom and Enron ran ads back in the day. However DraftKings’ heavy ad blitz, including over $100 million spent in 2015, signifies that the company has committed to be the industry leader in the long term.
DraftKings has also recently upgraded their New York City offices. They now occupy over 23,000 square feet of office space on the fifth floor of a building at 400 Lafayette Street in Manhattan, according to New York City real estate site, therealdeal.com. The lease signed by DraftKings, runs for 5 years.
In short, DraftKings is legit. There aren’t complaints about people not getting paid, nor is there any question of legality, as there had been in the online poker days. So feel confident when playing on DraftKings. A wide receiver with a case of the “dropsies” is the only reason you should feel insecure playing on DraftKings.
Thank you for reading, and if you found this article at all useful, please consider using the promo code GJ100 when registering on DraftKings.com. Thanks again. (Photos courtesy of ph-stop and Jeffrey Beall via Flickr).