Where fantasy sports giants DraftKings and FanDuel have become even more successful in the sports betting platform, another giant fantasy mainstay has entered the social sports betting realm.
Yahoo Sports acquired Wagr, the company announced on April 25.
Wagr, a peer-to-peer sports betting app, became the first such platform to obtain a license in the U.S. The Yahoo deal comes as sports betting operators rethink the value of media partnerships and the difficulty of signing customers without breaking the bank in promotions, according to SportsHandle.
“The acquisition of Wagr is an exciting step in the development of the next generation of Yahoo Sports’ gaming portfolio,” Yahoo CEO Jim Lanzone said in a statement. “Wagr stands out for their innovative emphasis on community and social engagement in sports gaming, which aligns perfectly with the Yahoo award-winning fantasy platform that has brought tens of millions of fans together around their love of sports for over 20 years.”
The acquisition has closed with no terms revealed.
Where bettors in traditional sportsbooks wager against the house, with peer-to-peer platforms, they bet against their friends and others. Wagr sets the odds and manages the payment exchanges for a 5 percent fee, well below that charged by mobile sportsbooks.
After obtaining $12 million in funding, Wagr launched in January 2022 in Tennessee. And last April, the company became the official sports betting partner of the Nashville MLS franchise. But Wagr shut down without comment during the last quarter.
The company resurfaced with the Yahoo deal. Co-founder and CEO Mario Malavé said Yahoo’s scale and success will give Wagr access to a large number of fantasy sports users; Yahoo is number two on the fantasy sports platform on the internet, just below ESPN.com. In March, Yahoo Sports attracted more than 91.6 million visits, up almost 27 percent over February,
“Joining Yahoo allows us to continue delivering on our mission to connect fandom to social gaming while elevating our ability to execute through expanded resources, new partnerships, and technological capabilities,” Malavé said in a statement.
In 2019, Yahoo inked a multi-year digital partnership with BetMGM permitting the sportsbook operator to tie into the Yahoo Sports app, while betting transactions occurred through the BetMGdM platform.
Addressing stock analysts on DraftKings’ 2022 fourth-quarter earnings call, CEO Jason Robins revealed that the company had to discontinue a few of those deals to reach its goals on efficient marketing.
Last fall, ESPN came close to an agreement to license its sports betting brand to DraftKings, but the deal never consummated, Robins said. DraftKings had to discontinue some partnerships to enable the firm to achieve efficient marketing goals.
The new Fanatics Sportsbook is relying on its online sports merchandise business to achieve up to 2.5 percent conversion rates without offering any promotions, according to CEO Michael Rubin.
Sportsbooks sought conversions from 5 percent of season-ticket holders as part of partnerships with franchises, but if operators convert 0.5 percent they are satisfied, an industry expert told SportsHandle. Yahoo has not disclosed how it will convert fantasy sports users into social sports bettors from Wagr.