Daily fantasy sports companies aren’t having a great last few months, and on Thursday two of the industry’s giants announced another big hit to their businesses. DraftKings and FanDuel have suspended contests on college sports indefinitely in all states as part of an agreement with the NCAA.
Breaking: DraftKings, FanDuel to suspend contests on college sports indefinitely in all states in agreement with NCAA. Story filed to ESPN.
— David Payne Purdum (@DavidPurdum) March 31, 2016
The decision was reportedly voluntary on the part of both companies, and NCAA president Mark Emmert commended them for the decision:
“We appreciate and commend DraftKings and FanDuel’s action to stop offering contests involving college, high school and youth sports. This action culminates months of hard work between all parties to reach a place that is good for amateur sports and most importantly, the young people who participate. We will work diligently with our member schools over the coming year to ensure such amateur sports ‘carve outs’ are included in pending states’ legislation.”
After this weekend’s college basketball games, all collegiate contests on both sites will end.
FanDuel and DraftKings had apparently both been involved in lengthy discussions over ending their collegiate offerings and decided now was the right time to earn some good will. College sports only make up about three percent on FanDuel’s revenue, and the NFL market is 10 to 20 times bigger than college football on DraftKings.
While this likely won’t be a big hit for either company financially, the revenue opportunities that college sports could present long-term might now be gone forever. After months of setbacks for the industry, this is yet another to add to the list.