The 100-foot Mojo eases away from the dock to navigate Newport Harbor, passing waterfront mansions and celebrity getaways on its way to open waters.
Champagne flows and plates of appetizers circulate among glad-handing guests who spill out from the newly remodeled main cabin onto decks to soak in the Southern California sun.
The custom cruise is void of millionaires—but money is on the minds of many aboard. This is a warm-up for the $100,000 FantasyAces Basketball Championship, a test of skills for 12 hopefuls who will square off in a one-day fantasy tournament.
The players all put up an initial $109 entrance fee and have made the final round by surviving 13 weeks of preliminary contests.
Some have traveled from as far as South Florida. Others drove down from Pasadena. All are here to compete at the live finale at the American Junkie sports bar on the Balboa Peninsula, where the winner will take home a $40,000 grand prize and a lot of bragging rights.
Perks for finalists include a weekend stay at the Balboa Bay Resort for each contestant and a guest, as well as an inclusive pass to gourmet eats and as many as drinks as one can handle.
The blowout is part of a branding and marketing campaign to draw new players to the daily fantasy sports website run by Aliso Viejo-based FantasyAces LLC. The 2-year-old company aims to give away $30 million in prize money this year after taking an industry-standard 10% cut from total wagers.
Big Leap
That’s quite a leap from the company’s first tournament in 2013, when 120 players competed for a $1,000 purse. FantasyAces now has more than 12,000 players using its site. It hopes to eclipse 60,000 this year, according to cofounder Bryan Frisina.
“There are more people on the sideline that are coming to play and getting some skin in the game—they can see the writing on the wall,” said Frisina, who launched the company with his brother Trent and father, Tom, a former executive at Electronic Arts. The elder Frisina was part of the Redwood City-based video game giant’s upper management during an era when it scored big hits with “Battlefield,” “Bond,” “Rock Band” and “Lord of the Rings.”
Now he’s helping his sons as they seek a spot selling another kind of fantasy. Indeed, the Chicago-based Fantasy Sports Trade Association estimates that the daily fantasy sports industry generates about $3.6 billion in annual revenue from transactions, Web hosting, prize fees, challenges and subscription services.Â
Daily fantasy sports sites generate revenue from players who pay as little as a dollar a day to participate in some fantasy leagues to hundreds of dollars to get into tournaments. It’s not uncommon for players to enroll in several daily events run by different companies. Players set up an online account with a credit or debit card that is adjusted per game play.
FanDual Inc. in New York and Boston-based DraftKings Inc. dominate the field with a combined 96% market share, according to Eilers Research LLC in Anaheim Hills.
The remaining slice of the pie, still growing in real dollars, is up for grabs among a handful of competitors.
“There are a number of smaller companies vying for the No. 3 spot,” said Eilers Managing Director of Digital & Interactive Gaming Adam Krejcik, who launched the research firm in late 2012 with former Roth Capital Partners colleague Todd Eilers.
FantasyAces has a bite on the third spot and is looking to consolidate its position. It hopes to stand out from the pack with a user-friendly website that offers unique lineup options.
KLAA
It’s up to eight employees and has put an emphasis on customer service. Marketing in anchored by exclusive partnerships with sports radio station KLAA, which operates out of Angel Stadium, and Huntington Beach-based FantasyAlarm, which has 2.5 million monthly online visitors who seek inside fantasy tips and advice.
The KLAA deal includes a weekly spot with Trent Frisina talking fantasy sports with host Roger Lodge, as well as broadcast promotions.
The daily fantasy segment has gained a high profile in the past few years as the two top dogs attracted investments—$155 million and counting—and struck deals with professional sports leagues, as well as initiated marketing blitzes with national TV campaigns, satellite, and traditional radio spots and programming, and stadium advertisements across the country.
“It’s one of the fastest-growing segments of the online consumer entertainment market,” Krejcik said.
And it has room to grow, considering it’s drawn about 2 million players, a small percentage of the overall fantasy sports market that has some 41 million enthusiasts globally, the lion’s share residing in the U.S., according to FSTA.
Fantasy football is the big draw and accounts for an estimated $10 billion in annual revenue. The game, created decades ago, largely remains a season-long format as opposed to the daily fantasy competitions. Fantasy football participants—groups of friends in some cases, or strangers who enroll online—compete in designated leagues on websites run by the likes of Yahoo or ESPN.
Teams are often represented by a single competitor who is owner, coach and general manager. Each team drafts players and starts them in a lineup that generates scores based on actual game statistics.
Game of Skill
Daily fantasy sports, which is considered a game of skill, is legal in 45 states due to its exemption from the 2006 Unlawful Internet Gambling Enforcement Act. Growth has exploded in the era of social media, pushed along by rising purses and, ironically, another legal twist.
When the FBI shut down the three largest online poker sites in 2011—part of an investigation that eventually led to charges of money laundering, bank fraud, and gambling law violations—8 million to 10 million U.S. gamblers wanted a new game.
Daily fantasy sports filled the bill for some while also drawing hordes of players from a mix of backgrounds. Many are sports wonks or ex-jocks, such as fantasy sports analyst Stevie Young, a one-time semi-pro baseball player who took third in the FantasyAces Basketball Championship. Others are business professionals along the lines of Thad “RadThad954” Houston, who captured the top prize and spends his work week interpreting X-ray images as a radiologist at the Carolinas HealthCare System in Charlotte, N.C.
“If you have a good routine and study the right things, you can be profitable,” said Young, who entered the baseball season with a $60,000 bankroll he’s accumulated since 2009. The 27-year-old Floridian writes a weekly column for Rotogrinders.com, a go-to source for insiders; hosts popular podcasts; and travels around the country as a featured commentator on XM and other media outlets.
Young, who helps his father run an ammunition manufacturing company near Orlando, Fla., aims to make fantasy sports his full-time job this year.
Houston, 47, also has won his fair share of big purses, qualifying for several live finals events at the Playboy mansion hosted by Starstreet, which was acquired last year by DraftKings for an undisclosed sum.
He started playing seasonal fantasy sports about 20 years ago with friends. It’s now an everyday activity, and he’ll often find time to study up at the bus stop, while he’s waiting for his five kids, or in line at the grocery store—whatever his schedule as an overnight emergency room radiologist allows.
“It’s mind-blowing the amount of money out there,” said Houston, who has won more than $200,000 in his three-plus years on the daily circuit. “It’s taking America by storm, and it’s only going to get bigger because of the popularity.”
$100,000 Prize
FantasyAces is gearing up for its next big event when 20 qualifiers will compete in August in a live one-day final at Angel Stadium’s exclusive Ketel One Club for a $100,000 grand prize.
The $250,000 FantasyAces World Baseball Championship, billed as the industry’s first live championship event at a professional sports stadium, offers finalists a flight and accommodations, free food and drink, another yacht trip, stadium tour, and a home run derby broadcast live on the scoreboard.
“The live event final is where it’s at,” said Bryan Frisina. “That’s what brings in the big players. They chase it.”
