00:00The commercials are everywhere.
00:02FanDuel's one-week fantasy football leagues are paying $75 million a week with immediate cash...
00:07Today, FanDuel is the largest player in the multi-billion dollar daily fantasy sports industry.
00:12But in 2009, at South by Southwest in Austin, the concept didn't even exist.
00:17FanDuel's five Scottish founders, whose prior startup was struggling, needed to pivot.
00:22We were brainstorming in the garden. I think we used the shed as a whiteboard and post-it notes for
00:27different ideas.
00:28One of those ideas? Fixing American fantasy sports.
00:31Even though they have more than 50 million players, many on huge sites like Yahoo or ESPN.com.
00:37There were some flaws with the format. You need to wait the whole season to get your prize.
00:42If one of your players gets injured, you really lose interest because you're out for the year.
00:46Their solution? Make it daily, for money.
00:48That idea became FanDuel, now a sizzling New York startup valued at more than a billion dollars,
00:54that's remaking an American pastime.
00:56So rather than regular fantasy football where you play for a season, with FanDuel you just play for a day.
01:01Make it more immediate, give people faster gratification.
01:05For some, that gratification equals millions of dollars.
01:08For others, beating their friends is reward enough.
01:11For FanDuel, this meant huge growth.
01:13We grow every year two to three times, and we're definitely seeing that growth again this year.
01:18FanDuel even counts the NBA as an investor, and some NBA and NFL owners joined the $275 million funding round
01:26in July.
01:27Investors like the company because it's fundamentally changing the way that people consume sports.
01:31When people start playing FanDuel, even if they were a fantasy fan already, they consume 40% more sports than
01:37they had in the past.
01:37But in October, the industry was hit by allegations that some employees were profiting off insider information.
01:44And a longer-term challenge remains, the spectrum of regulation.
01:48To some critics, its daily wagering and million-dollar payouts sound like gambling.
01:52It's not.
01:53It's a game of skill.
01:55We have statistical studies to show that the best players continue to win.
02:00For now, the law is on their side.
02:01But if new regulations are imposed, FanDuel's business model could be threatened.
02:06In the meantime, this Silicon Alley unicorn plows ahead unfazed.
02:10As we think about the future, we think about our mission as a company, which is to make sports more
02:15exciting.
02:15And you see them screaming at the TV, spraying each other with champagne when they win.
02:19It's just an amazing thing to see.
02:23So...
02:23...
02:24On the other hand, we may have to do more on the game changer.
02:25Oh, here's the game changer.
02:25So if you think about it, let's play a game changer.
02:26We'll be the only one two to kill you.
02:26We'll be the only one with the players.
02:26Our team hates the game changer.
02:26Their team has an amazing team who's really who also wants to challenge you.
02:26Or is it viable for you?
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