Given the numerous setbacks DraftKings suffered recently, the least surprising setback is the firm being denied an exclusive advertising deal with lucrative sports giant ESPN. ESPN a subsidiary of Disney has broken the contract they made with DraftKings.
Reports suggest that ESPN executives called for the ending of the deal; however, some publications indicate that DraftKing executives also wanted out of the deal too.
Disney intends to invest in family-friendly brands and not controversial brands like DraftKings hence why they opted out.
On the other hand, Rupert Murdoch’s Twenty-First Century Fox scaled down their $160 million investment by sixty percent. The filling was made this past Monday according to the Securities and Exchange Commission.
Fox cited on Monday’s filing that executives came to the investment cuts conclusions after they went through DraftKings’ current evaluation.
The Boston-based fantasy-sports organizer (DraftKings) brings sports fanatics together who form teams in a league and compete against each other for winning prizes. Having been found back in 2012, the firm argues that all its contests are legal and skill-based.
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Illegal Gambling Operation
A growing number of state attorney general hailing from New York, Texas, Washington, Illinois, Hawaii, Washington, and Texas declare DraftKings as an illegal gambling organization.
Moreover, the attorneys have outlawed the firm’s contests. Some of the grave accusations levied against DraftKings include the rigging of several fantasy sports contests.
In October 2015, a DraftKings employee scooped a $350,000 cash prize after contesting of rival’s FanDuel platform.
The winning prompted a myriad of questions such as if it is right for fantasy-sports employees to be actively trading insider information which made it easy to beat the system.
After conducting investigations, DraftKings said no cheating evidence was discovered.
However, employees were immediately banned from taking part in the sporting activity. However, Federal lawmakers are not satisfied yet and are demanding that investigations be carried out in the contests for better and greater oversight.
What Happened to Draftings Fortune?
The drama that has plagued DraftKings has changed the company’s fortune. January 1st, 2016 DraftKings signed a lucrative deal with ESPN to become the exclusive fantasy sports network that advertises on the sports channel. Barely a month in and it gets terminated!
Fox, on the other hand, invested a staggering $160 million for an 11-percent stake just last summer, and now they have reduced their investment. Where the company proceeds from here remains unclear, however, reports emerge that DraftKings is expanding to Europe.
Europe may prove to be good tidings as gambling laws are not as stringent as they are in the United States. We await with baited breathe to see what the future holds for this once-great fantasy-sports giant!
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Article courtesy of John Hawthorne who is a writer and sports journalist who like to keep up to date on the latest news that affects the sports gambling industry.