Sports Illustrated, owned by Time, Inc., recently announced it will re-launch its Fan Nation web site with a new daily fantasy sports play-for-cash app. Built in conjunction with TopLine Game Labs, the app will allow people to challenge friends to single-day matchups and bet real money, with Sports Illustrated taking a percentage of each bet.
The growth of single-day fantasy has coincided with start-up websites like FanDuel and DraftStreet, which offer people the chance to play single-day fantasy for money. Sports Illustrated wants to capitalize on this emerging, revenue-generating industry.
Editor Paul Fichtenbaum acknowledged raising revenue through the new web site and the fantasy sports app represent a huge departure from the magazine past. However, he noted Sports Illustrated must recognize reality which includes competition like ESPN and Yahoo as well as Bleacher Report and Deadspin newcomers.
Sports Illustrated’s move into fantasy sports is expected to reverberate throughout the marketplace, which until recently was led almost exclusively by startups since most public companies considered the category too risky under state and federal law. But since start-ups like FanDuel first appeared, the federal government mostly has taken a hands-off approach. Professional sports leagues have not challenged the games in the courts. In fact, Major League Baseball has a cooperative agreement with at least one daily fantasy website.
But risks remain in about a dozen states, such as in Tennessee and Illinois, where daily fantasy sports would be considered illegal games of chance. Illinois has unsuccessfully tried to disgorge daily fantasy winners, but other states could mount challenges daily fantasy games.
Still, since Sports Illustrated has jumped in, most likely CBS and Yahoo! soon will offer daily fantasy sports apps. Both companies already offer full-season fantasy sports contests and CBS has tried short-term games such as an NFL playoff challenge.
