Underdog and PrizePicks: Fantasy Sports Market Shift

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00:00All right, finally, let's get to the fantasy operators here, Underdog and PrizePix.

00:08I know they have been, you know, under a lot of fire here over the past year.

00:11These peer-to-peer and also some of the picking games have been banned in some different places.

00:16What's the latest on those two companies?

00:18Yeah, this is kind of relates to what we were just talking about in terms of competition,

00:23other operators that have existed.

00:24Basically at this time last year, these companies, PrizePix and Underdog, offering products that

00:29a lot of people have said, hey, these are just player prop parlays.

00:32They're under fire in over a dozen states.

00:35And there was a real thought in the entire industry that maybe these companies won't

00:39exist anymore.

00:40I won't be able to kind of offer the sports betting adjacent product.

00:43Now you fast forward a year later, they're in more states with a different kind of product.

00:48They've shifted from this player versus house format where I would pick overs and unders

00:52on three players or more that are placed $10 in entry fees to win maybe 100, 200, something

00:59like that.

01:00They've shifted the mechanism with how the money works.

01:02So instead of playing against the house, you're playing in a pool of peers where the prizes

01:07are determined based off of what other people have put on the line.

01:11So it sounds kind of convoluted, but it's essentially allowing them to keep offering

01:16the same games in more markets with kind of the same structure and it's really paying

01:21off for them.

01:22We've seen investment banks saying that they now make up about 32 or 30 to 37% of all downloads

01:29this sports betting, this NFL season combined with sports betting apps and their downloads

01:34are up about 67% overall while the rest of the market kind of consolidates towards draftings

01:39and fan duels.

01:40So underdog kind of led the way with this peer to peer shift going to the state saying,

01:45I know you want to crack down on this.

01:47I know you don't want us to offer our products anymore.

01:50We'll now do it a different way.

01:51And they've used that to expand the market, expand the offerings and we're seeing it pay

01:55dividends for them as well.

01:57So what was kind of a huge story last year, they've kind of really turned into an advantage

02:00for the company.

02:01And we've even seen companies like DraftKings follow suit with their own Pick'em products

02:05in different states.

02:06So they kind of laid out this blueprint and it seems to be working for them.

02:10Now they still offer the player versus house product in states like California, states

02:14like Texas, where sports betting is illegal.

02:17That's kind of going to be the next battleground where this shakes out, whether or not they

02:21can keep doing that, whether those states, I don't know, wake up, whether those states

02:24finally care, whether they do care at all, California is examining it, but we don't

02:29know when that's going to happen.

02:30And whether the sports books now are kind of just okay with, you know, where this is

02:34shaken out, if they see this as kind of a win for them, or if, you know, the fantasy

02:38companies have kind of turned this around and say, we're just going to change the product

02:41and go to more markets because it seems to be working.

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