It happens all the time in the business world. The little guy grinds, hustles and works away to earn an honest buck and then the big player moves into town. The little guy is forced to either adapt or else it dies.
The fantasy-sports world is a multi-billion dollar market, and that world is currently ruled by FanDuel. DraftKings checks in at second place. Those sites offer fantasy games in a vast variety of sports. Mixed martial arts, being the niche sport that it is, only has a small piece of the multi-billion dollar pie, but that slice is growing with each passing year.
The little guy in the MMA fantasy sphere is Kountermove, which has been running fantasy MMA contests since 2011. With Kountermove’s success, it was only natural that a big competitor would take notice and look to enter the space. In 2015, DraftKings became that big competitor.
DraftKings, which has been around since 2012, entered the MMA market by offering big prizes in its fantasy contests. This makes it a fight that Kountermove cannot ever win. DraftKings has other much more mainstream sports that it caters to, thus giving the company a higher capital that it can spend in its attempt to secure the ever-growing MMA market.
While the initial influx of high-dollar games has certainly caught the attention of a lot of players and in effect won them over, the question will remain as to how long DraftKings will continue to shell out the big bucks for a market share. In order to compete, Kountermove will need to put on some big-money tournaments of its own. Sure, the company may already put on some relatively high-prize games in relation to the buy-in for the customer, but it’s nothing like the $20,000, $30,000 and even $60,000 prize-pool games promoted by DraftKings.
Kountermove, being a strictly combat-sports fantasy platform, is never going to be able to offer that same money, unless it wants to go bankrupt. For a lot of players, the idea of loyalty will go out the window when the almighty dollar is at stake. So, for the time being, it’s a battle that Kountermove just has to accept that it will never win.
What the company does well, though, is in catering to the player who doesn’t have a lot of money to invest. It recently introduced a lot more low-value games in the sub-$1 buy-in category. There is still a decent reward when a player wins one of these games, making it much like a penny slot machine — it’s all about repeat business.
While DraftKings has a lot more registered users — almost 40 times that of Kountermove — it doesn’t necessarily equate to being more successful in getting customers to continually spend money. Recently, DraftKings has been accused of deceptive conduct in regards to its advertising, and the company is even facing a class-action lawsuit filed in the state of Florida. Just how many of its users signed up nationwide under the pretenses of taking advantage of the company’s bonus structure is yet to be seen, but, as a potential customer, nothing raises question marks like a scorned customer base.
The UFC threw a wrench into the works by signing an exclusive partnership with DraftKings in the early stages of the year. By gaining the blessing of the biggest MMA brand in the world, DraftKings has gained yet another leg up on its competition. The big money and big exposure as a partner to the UFC certainly allowed DraftKings to deliver a nice uppercut to Kountermove. It’s not all bad, though. The sponsorship between DraftKings and the UFC is rumored to have been a short contract due to FanDuel’s speculated move into the fantasy MMA market. If that is the case, there is no doubt that the UFC would move to be aligned with the market leader of fantasy sports, giving DraftKings a year of increased growth and Kountermove a year to adapt and get ready for yet another competitor.
There are still a lot of people who have not yet tried their hand at fantasy MMA contests. For those people, the lure of a high prize pool might peak their interest, but Kountermove is probably the better tool to learn the trade. DraftKings may wet the appetite of a prospective player, but after losing some high-stakes contests back-to-back (or depleting their account balance against the real pros while playing football, baseball, basketball and ice hockey games), players may find that Kountermove can be the less overwhelming option.
To use a dated cliché, the glitz and glamour of DraftKings is certainly the flavor of the month, and rightfully so. The company is injecting big money into the industry. Whether or not it cares about the growth of the sport doesn’t really matter. At the end of the day, it is a business, and it is doing what it thinks it needs to do in order to make some quick, easy money. The partnership with the UFC works well for both companies. It legitimizes the fantasy offering and shows an investment in mixed martial arts as a sport.
It’s an interesting time for MMA in the fantasy-sports realm. If Kountermove can weather the storm and stick around during a time when the sport’s biggest brand is pushing DraftKings, then Kountermove deserves a piece of the pie. Just how much it can take, well, that’s up to Kountermove. The company will need to continue to create a point of difference, like it has done by offering other combat sports, because, as we know, in life, money talks and DraftKings has one hell of a conversation going on at the moment.