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DraftKings says rival FanDuel lost top spot

DraftKings founders (from left) Paul Liberman, Jason Robins, and Matt Kalish.
DraftKings founders (from left) Paul Liberman, Jason Robins, and Matt Kalish.Jon Chomitz Photography

Since entering the daily fantasy sports market three years ago, DraftKings Inc. has been chasing FanDuel Inc., the undisputed industry leader. Now that the fast-growing Boston company believes it is poised to surpass its New York rival, DraftKings is rubbing it in by demanding that FanDuel publicly relinquish the top spot.

DraftKings said it expects to collect at least 25 percent more entry fee revenue than FanDuel during the business quarter that ends Sept. 30. It has not, however, provided financial documentation to substantiate that claim.

There is one more weekend of football games before the earnings period closes, but DraftKings considers its lead to be insurmountable and is virtually certain that it will top its older, more established competitor for the first time ever.

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If it does, the reversal would signal a remarkable — and rapid — power shift. FanDuel took in more money in entry fees during the fourth quarter of 2014, $370.7 million, than DraftKings collected all of last year, $304 million.

Yet the locals are so confident that they already have asked FanDuel to remove from commercials its oft-repeated claim to be the industry leader, escalating an ad war that has turned sports fans’ television screens into a battlefield for weeks. Combined, DraftKings and FanDuel have aired almost 38,000 TV ads nationwide in the past month, ranking first and 10th, respectively, among all brands, according to the ad tracker iSpot.tv Inc.

DraftKings cofounder Paul Liberman revealed the advertising demand Friday during a conference at Babson College — though he apparently didn’t mean to. Addressing an audience of roughly 100 students, Liberman fielded a question about competition with FanDuel and mentioned that “we’re going through a formal process of making them take ‘leader in fantasy sports’ out of all their marketing messages.”

“We’re very, very competitive with them,” he added.

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Asked by a reporter to clarify his remarks after the speech, Liberman kicked himself and said he hadn’t planned to bring up the subject. But he explained that officials at the two companies have had amicable discussions about removing the “leader” claim.

Just 18 months ago, DraftKings and FanDuel played opposite roles in a similar marketing squabble. Last March, FanDuel demanded that DraftKings stop touting itself as the “number-one destination for daily fantasy sports on the Internet” and threatened to sue.

DraftKings has since referred to itself as “the best place to play daily fantasy sports” but now believes it can make a rightful claim to the top spot.

Both are private firms and have publicized financial information only sporadically. But it is possible for each to approximate the other’s revenue by tracking the number of entrants, and price to play, in every fantasy sports contest.

A FanDuel spokeswoman did not respond to a Globe inquiry about whether the company will, in fact, drop its claim to be the one-day fantasy leader.

Daily fantasy sports contests generally require entrants to pay for a chance to win cash prizes — a system that recently prompted Massachusetts Attorney General Maura Healey and US Representative Frank Pallone Jr. of New Jersey to question whether they should be considered illegal online gambling.

DraftKings and FanDuel maintain that in all but a handful of states, their contests are perfectly legal, based on an exemption to the federal Unlawful Internet Gaming Enforcement Act, which distinguishes between betting on point spreads and entering fantasy sports contests that “reflect the relative knowledge and skill of the participants.”

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In football contests, DraftKings and FanDuel users draft real NFL players for their imaginary teams and score points based on how well those players perform on the field.

Traditional fantasy contests last all season, but the daily contests (which can actually span five days, in some cases, covering NFL games played Thursday through Monday) hold new drafts every week. The short-term format is meant to appeal to fans who enjoy fantasy contests but don’t like the commitment of managing a roster for several months.

Vying for daily fantasy supremacy, DraftKings and FanDuel this summer raised vast sums of investment money — $300 million and $275 million, respectively — and pumped much of it into marketing. In just the past week, DraftKings spent $15.9 million on TV ads, and FanDuel spent $14.6 million, according to iSpot.

If DraftKings gets its way, some of FanDuel’s money will have to be spent on new commercial messages that don’t claim number-one status.


Callum Borchers can be reached at callum.borchers@globe.com. Follow him on Twitter @callumborchers.