Hotbox has partnerships with more than a dozen teams in the NHL and NBA to host free fantasy games, with some teams delving into Hotbox's pay-to-play options.
In 2012, the New Jersey Devils became the first National Hockey League club to offer a team-specific fantasy game. Over the past few years, more teams have latched on, but only recently have the relationships between teams or leagues and fantasy sports taken a new turn toward pay-to-play games.
It shouldn’t come as a surprise that the Devils were at the head of that trend, too.
In October, the Devils announced a new agreement with fantasy sports provider Hotbox Sports – the same company they had originally partnered with in 2012 – to offer fans entry-fee games that focus on New Jersey players.
The games, which are expected to debut within the next several months, will be hosted exclusively on Hotboxsports.com and offer cash prizes to those that enter.
In exchange, Hotbox receives in-arena advertising and web and social media promotion as well as traffic to their site though, per NHL rules, the Devils cannot indicate in its promotions that there are paid games available.
“It’s a very big step for us,” said Hotbox Sports Chief Marketing Officer and Head of Business Development Terry Lyons. “We are very happy that the Devils saw the future and were willing to move forward on this type of deal.”
It turns out the Devils saw into the not-so-distant future.
The NFL’s New England Patriots signed a partnership deal with DraftKings and less than a month later the NHL and DraftKings teamed up and the NBA formed a partnership with FanDuel.
Hotbox has partnerships with 13 other teams in the NBA and NHL to host free fantasy games and is working toward more in North America and overseas. The franchises have used the Hotbox setup of picking players to score goals or points to offer fans a chance to compete against each other for prizes. The Devils are giving away a night in a 16-person suite to their grand prize winner.
Delving into paid games was the next natural step, although Hotbox’s entry-fee games are a little different from some traditional fantasy games. Users are charged a registration fee and have an opportunity to win a grand prize.
The team saw a chance to grab a different faction of the sports-consuming audience.
“I look at it for the young consumer audience who are fixated by being able to play socially against their friends,” said Jonathan Press, Special Advisor for the Devils and Philadelphia 76ers. “They might not be the everyday appointment viewers to a New Jersey Devils game, but if their friends happen to be in and say, ‘I’ve got my game registered for this week, are you in?’”
Fan engagement and fantasy games are a proven model. It is widely considered a driver of the NFL’s success and has tangible effects for teams and leagues.
“Because people are competitive, they want to spend some time figuring out how to create the best roster, so many users do a significant amount of research while they're drafting their team,” sais Nigel Eccles, CEO and co-founder of FanDuel. “We see a 40% increase in sports consumption after people start playing on FanDuel. FanDuel drives a significant spike in sports consumption.”
The Devils believe adding an extra layer to their fantasy package will have the same results.
“When players are in and start to get alerts on what’s happening in the game," Press said, "they see they are losing to a friend, or ahead. They will look down at the screen and say, ‘oh, wow, we are on MSG-plus tonight, let me tune into the game.' Now we have extra viewers that might not have been watching.”
The roots of the Devils’ new agreement with Hotbox extend back to January, when the team officially partnered with the online Poker company PartyPoker. The team worked with the NHL to form guidelines concerning the partnership so as to avoid issues with gambling.
The successful deal with PartyPoker acted as good faith in working on new rules for paid fantasy games. Another influential factor was the NBA changing its guidelines recently to allow similar games. Seeing an opportunity, the NHL elected to follow suit.
The NBA has been progressive in its stance on legalizing sports gambling, but that still appears far down the road. Fantasy sports are not considered gambling, due to the 2006 Unlawful Internet Gambling Enforcement Act which made most Internet gambling explicitly illegal, but created an exception for fantasy.
As for the NBA and NHL partnerships with FanDuel and DraftKings, they are a little different from Hotbox in that they are daily leagues. Hotbox’s product is for three-game spans. The two companies’ deals with the NBA and NHL, respectively, are for the providers to be exclusive on the league’s sites. FanDuel also has individual team partnerships.
“We're delivering on that promise to shareholders and, in addition, the league's deals have partnered with 6 NBA teams as well as the Washington (football team),” Eccles said. “The NBA also saw a great opportunity to invest with us and become a partner, and we wanted to secure this at the start of the season to maximize the outreach to basketball fans around the country.”
According to ESPN, FanDuel has brought in 650,000 new paying players in the past three months. Before this year, they hadn’t had a single quarter with more than 200,000 active players. The Devils’ free Hotbox game has been “steadily” in the thousands without yet putting on a full court press of promotion.
Like the Devils-Hotbox and NBA-FanDuel partnerships, the NHL’s agreement with DraftKings includes marketing across many platforms. The league will promote its fantasy leagues on Twitter and Facebook as well as NHL.com, NHL Mobile and NHL Network segments. DraftKings has also partnered with numerous NHL Clubs.
Where the NBA and NHL fantasy team and league partnerships go long term? All three companies are trying to replicate the love for fantasy sports that exists within the NFL.
“We see enormous potential with basketball,” Eccles said. “NBA fans are typically younger, passionate, mobile and want to consume more sports. But due to the length of the basketball season, many fans have never committed to seasonlong fantasy. That's where FanDuel comes in: our platform offers a commitment-free, but compelling way to play fantasy basketball.”
The possibilities are pretty much endless, Press said.
“Over the next year or two, you are going to see a lot of versions of the (Hotbox) game,” he said, noting he gets calls every day from other teams about the future of fantasy. “We could see games that are ‘you-make-the-call’ type games where questions are posed during the course of the game.”
Interviewed for this story: Terry Lyons, (973)757-6110; Jonathan Press, (973)757-6110; Nigel Eccles, (800) 475-2250