DraftKings, FanDuel NFL Big Tournaments Struggle Amid Daily Fantasy Scandal, Court Cases

Amid continued legal struggles and following a scandal that rocked the industry, major daily fantasy services DraftKings and FanDuel have seen a steep drop in their total prize pools for the biggest NFL tournaments. The huge weekly contests, which feature millions in prize money and a limited number of winners, have trended downward throughout the professional football season.

Adam Kreijcik, managing director of digital and interactive gaming at Eilers Research, which studies the daily fantasy industry, tweeted Monday a graph showing the continued shrinking of the prize pool in Guaranteed Prize Pool (GPP) contests. From Week 1 of the NFL season to Week 14, which took place this past weekend, combined prize pool money from FanDuel's Sunday Million and DraftKings' Millionaire Maker dropped from around $15 million to about $4 million, according to the graph.

Kreijcik declined comment Monday, citing a new firm policy against discussing daily fantasy with the media. A report he co-authored, however, suggests users have gravitated away from the big GPP games after an October scandal involving a DraftKings employee unintentionally releasing customer data then winning $385,000 in a FanDuel NFL contest that same week.

"There are numerous explanations as to why these tournaments have been experiencing declines, not the least being the negative PR /extraordinary events surrounding the industry lately," the mid-November report read. "However, we believe there may also be some larger fundamental issues at work, namely, a general shift towards 'cash games', which provide a much greater value proposition for the majority of all users."

The big tournaments involving a modest entry fee and the chance to win huge payouts are the contests most associated with daily fantasy. They had been heavily featured in ad campaigns by FanDuel and DraftKings.

The industry has seen increased scrutiny following the scandal in October, with calls for further regulation or outright bans. Nevada first barred the games, requiring that the services acquire licenses. The New York state attorney general has also moved to ban daily fantasy, calling the sites illegal gambling.