FanDuel Racing Aims to Attract Daily Fantasy Players

Seeing potential to bring pari-mutuel wagering to a large, new customer base, FanDuel Group has launched an advance-deposit wagering interface specifically marketed to daily fantasy players.

FanDuel, like ADW and racing channel TVG, is a property of Flutter Entertainment. FanDuel operates one of the largest daily fantasy sports platforms in the world, boasting one million active customers and eight million overall customers. Daily fantasy sports competitors select players in professional sports and are rewarded based on the real-life performance of those competitors in sports like football, basketball, and baseball.

Through its FanDuel Racing platform, FanDuel believes it will be marketing pari-mutuel wagering to an untapped customer base. Stephen Kennelly, vice president of racing for FanDuel, said it's a long-term initiative with real potential to bring in new players.

"We're planting acorns here. We're not going to be doing tens of millions of dollars in handle overnight, but it's growing. And when we get back to football season, we'll see a real acceleration in active players," Kennelly said.

A veteran of marketing at TVG, Kennelly noted that marketing on the ADW side is a constant battle to keep players engaged or to reengage customers. As ADWs battle for customers, there are relatively few new customers to attract. Though ADW has been a growing segment for pari-mutuel wagering, the fact that overall wagering has been flat suggests that many of its bettors have simply moved from tracks or simulcast outlets to ADW.

That's where Kennelly sees potential for FanDuel Racing as it tries to engage new horseplayers from a group of people already investing time in statistical study in selecting their fantasy teams. Those players are already using stats and information to make decisions, so handicapping races wouldn't seem to be as intimidating as it may for new horseplayers.

FanDuel said less than 5% of DFS customers are active on TVG.

"We're talking about a market of millions of people putting together their fantasy teams. If we can get a small percentage of that market, that would be sizable growth for the industry," Kennelly said. "I'd love to be at Keeneland two or three years from now and see that the growth in wagering on racing is coming from that audience."

As FanDuel aims to develop new horseplayers, it has launched a mobile app and website platform that will look familiar to daily fantasy players while providing added information on the racing items that will be new to them. While the site has its differences from TVG, it still will be pari-mutuel wagering, like any other ADW.

When new players scroll above a wager type, they will have the option to read more about how the wager works. Handicapping information from TVG also includes explainer boxes on those various angles. The site includes win probability stats from numberFire, which already generates similar stats on the Daily Fantasy site. Kennelly said seeing that familiar numberFire name will mean a lot to players, and it will be expanded in the months to come.

"One of the things we're trying to do is make things easier. So using the power of the brand, it looks quite a bit like the daily fantasy app," Kennelly said. "One thing we should emphasize is we're not launching this to rival TVG. TVG is going to continue growing as it is and receive the same level of investment. TVG is not for the novice horseplayer, and we're seeing plenty of growth there, too.

"This is us trying to get that new customer. We're not trying to cannibalize TVG customers or even bring over customers from other ADW platforms. This is about trying to grow new players. We have all these active daily fantasy players, and we want to leverage them, especially the ones that don't know horse racing is out there."

FanDuel has conducted surveys and listened to focus groups to determine what features will be attractive to players who come over from daily fantasy. One such item is race video. Kennelly noted that in the world of daily fantasy, players typically rely on television to watch the events, which made online video of the races at FanDuel Racing attractive to DFS players.

"For a horse racing customer in a traditional ADW or coming from the off-track betting world, they're used to seeing all of this video. In the fantasy world, for any video you have, you have to turn on your television," Kennelly said. "We've done a lot of focus groups, and when we talk to that daily fantasy player—we ask them to rate the features—No. 1 is video. It's a key feature for horse racing."

Kennelly said they're marketing specifically to these customers, who like that there's more frequent wagering opportunities, live video, and free tips.

"The race lasts two minutes, and then you have that video before, during, and after," Kennelly said. "When they start engaging with the video, it's an 'aha' moment where they realize they can watch the race right there. If you're coming from a DFS audience, you're not used to that. We actually have to educate them that it's there."

FanDuel Racing is working to add more features before this year's Triple Crown races, but, oddly enough, Kennelly said the biggest time of year for this type of player figures to be football season—the most active period for daily fantasy. For players with downtime after making their lineups, racing could prove to be an outlet.

"For us, this isn't about being the perfect Derby Day experience so much as for guys who have completed their daily fantasy football lineup on a Sunday in October and then they're watching the scores to see how their team is doing," Kennelly said. "It's a chance to go over and play a race at Keeneland. That's how we fit within the fantasy world; that's how we're going to grow."

He also said FanDuel Racing players have a lot of interest in playing their local tracks, which could benefit tracks located in cities with NFL teams or other pro sports.

FanDuel will use promotions on its daily fantasy site to convince players to give the racing platform a try. It will also email players. Should they be interested, they may be better positioned to clear some initial hurdles that prove too tall for other potential ADW players.

For instance, there are potential customers who still don't realize that online wagering on horse racing is legal. Once those players attempt to sign up, they may be concerned about the information they need to submit. The funding source needed to supply money to bet with is a final hurdle.

FanDuel customers already have cleared many of those hurdles. If they launch a FanDuel Racing account, much of their information is already in the system, so there is a comfort level when completing additional information.

"What never ceases to amaze me is how many people don't know that online wagering on horse racing is legal in the country," Kennelly said. "We're talking about a serious double-digit percentage of people who don't realize it's allowed."

Kennelly said FanDuel and other daily fantasy sites have benefited from multimillion-dollar marketing efforts to help with that comfort level. ADW was never afforded such a marketing effort, but now it could benefit from daily fantasy's endeavor.

"FanDuel is this well-established brand with engaged customers in legal wagering," Kennelly said. "We're able to piggyback on that for racing and not have to pay—we don't have to do a multimillion-dollar campaign. We have these huge numbers of active players."

FanDuel Racing will be available in states that allow FanDuel's DFS platform and TVG ADW: Arkansas, California, Colorado, Connecticut, Delaware, Florida, Illinois, Kentucky, Massachussetts, Maryland, Minnesota, North Dakota, New Hampshire, New Mexico, New York, Ohio, Oregon, Rhode Island, South Dakota, Tennessee, Vermont, West Virginia, and Wyoming.

A link to FanDuel Racing.