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DraftKings Drops Sponsorship Deals for eSports Organizations
By Brodey Sheppard - March 17, 2016
Daily fantasy sports site DraftKings will no longer be sponsoring six major eSports organizations that were affiliated with the company last year.
In September of 2015, DraftKings launched a fantasy eSports platform and offered contests for the tournaments of League of Legends. Shortly thereafter, DraftKings announced deals with the following eSports teams: compLexityGaming, CLOUD9, Counter Logic Gaming, SK Gaming, Team SoloMid, and Mousesports.
It seems that eSports betting fans might have to postpone using their fantasy sports bonuses, because earlier this month the daily fantasy sports operator appeared to have severed ties with the six eSports teams it just signed. The DraftKings logo has been removed from the teams’ jerseys and websites.
The DFS operator offered no straight answer as to why it dropped the eSports teams. A spokesperson from DraftKings announced: “Our partnerships in the growing eSports field have been rewarding and we value our continued relationships with these businesses. We remain committed to offering exciting eSports DFS contests through the DraftKings platform and will continue to explore opportunities accordingly.”
Although the company gave no concrete answer, some have assumed that it is because of the recent financial issues that DraftKings faced in relation to the legalisation matters of DFS. DraftKings has been involved in some legal spats with Arizona, Iowa, Illinois, Louisiana, Montana, Nevada, New York, and Texas. All these states currently have laws that contain language making it difficult for DFS sites to operate within their jurisdiction. So far, only the state of Virginia has legalized DFS betting.
DraftKings also experienced some major setbacks last month. The DFS company ran into some trouble with Citigroup Inc. Citigroup blocked transactions between the daily fantasy sports site and New York state residents. Citigroup cited that the reason was “uncertain regulatory and judicial environment around [DFS] operations.” Around the same time, ESPN dropped its exclusive advertising partnership with DraftKings which made DraftKings the official daily fantasy sports offering across all of ESPN’s platforms. Now, the network has broken free from this exclusivity and is now able to sell advertising spots to other DFS companies.
When DraftKings and rival FanDuel made their forays into fantasy eSports just six months ago, they were doing so in a much different environment than they are today. As it is, it seems like the deals between the DFS site and the eSports teams may have been a victim of bad timing.