Cantor Gaming sees profits in "not gambling" industry
The number of Americans playing fantasy sports has grown by 2 million annually for the past two decades, transforming what was once the pastime of a few devoted baseball fans into a lucrative business, generating more than $3 billion annually in total revenues, according to an industry analyst.
“We’re very comfortable these days,” said Paul Charchian, president of the Minneapolis-based Fantasy Sports Trade Association, which will hold its annual convention this month at The Mirage. “We’ve been growing at a ridiculous rate. Some day we won’t be growing by 2 million annually and I’m sure there’ll be stories asking us why we’re not growing by 2 million anymore.”
Fantasy sports were born in the 1960s, but it wasn’t until the late 1980s and early 1990s that it developed into a national sensation.
“We have grown by 2 million people a year since the Internet took off in the mid-1990s,” Charchian said.
Today, fantasy sports participation tops 33 million people ages 12 and older in the United States and Canada. Charchian said the fantasy sports industry generates $1.44 billion annually in entry fees and prizes, and more than $1.63 billion in direct spending, including website-hosting fees, team T-shirts, and subscriptions to magazines and websites catering to fantasy players.
‘Fantasy sports is not gambling’
It’s a business that rivals legal sports betting in Nevada, with $3.2 billion wagered in sports bets in casinos statewide in 2011, according to the Nevada Gaming Control Board.
Charchian dismissed any comparison to gambling as “very short-sighted.”
“Fantasy sports is not gambling; we’ve cleared that hurdle,” Charchian said. “No fantasy league or website has ever been shut down due to a gambling indictment.”
The multibillion-dollar business has attracted interest from New York-based financial services firm Cantor Fitzgerald LP, which recently launched Cantor Fantasy. Cantor Fitzgerald also owns Cantor Gaming, a Las Vegas-based race and sports book operator.
Cantor Data Services, which runs Cantor Fantasy Sports online, is currently in 27 states, including Nevada. The website offers daily and real-money fantasy sports online, where players can wager anywhere from $2 to $50,000, and can play with two or as many as 200 players.
“It’s rapidly becoming the future of fantasy sports,” said Matthew Holt, vice president of Fantasy Games at Cantor Data Services.
“The response to our games has been tremendous, especially from mobile and tablet users.”
Holt said the website is being marketed to fantasy players who might want an alternative to season-long football or basketball games.
But fantasy sports are not for every Las Vegas bookmaker.
“It’s certainly true that the traditional fantasy sports product is pretty well-served in the marketplace today,” said Joe Asher, chief executive officer of William Hill U.S. “My own fantasy football league uses one of the major providers. There are people who are already in the business and quite frankly do a very good job.”
Asher said that beyond the typical prop bets offered by sports books, he hasn’t seen much of a market for fantasy players who want to put together a fantasy team of five players in a given game against another team.
“You haven’t seen the market develop around that,” Asher said. “To the extent, if there are opportunities out there, it is certainly something we’ll look at.”
Fantasy football most popular
According to the FSTA statistics, football is the most popular fantasy sport , with 21.2 million people participating annually, followed by baseball with 11.1 million, auto racing with 7.2 million participants and basketball with 5.8 million participants.
Then the figures drop off to 3.7 million who participate in fantasy golf leagues, 3.6 million in college football, 2.5 million in hockey leagues and 2 million playing fantasy soccer. The FSTA noted that individual league players topped total industry participation figures because fantasy players may take part in more than one league.
Contact reporter Chris Sieroty at firstname.lastname@example.org or 702-477-3893. Follow @sierotyfeatures on Twitter.
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