The majority of the states in the U.S of A. are still broadly down on the idea of sports betting. As a result, daily fantasy sports (DFS) acts as a kind of methadone in their absence. The COVID boom has been good for the gambling industry.
Poker players are big participants in DFS. But one DFS company in particular has caught the fancy of the poker world as an investment: PrizePicks.
Prize Picks has recently closed a round of equity funding. This is where a company raises money for operations by selling shares. After the closure, PrizePicks announced a roster of high profile poker players. Their new bank of investors includes Jeff Gross and Jack McLelland. It also includes poker agent Brian Balsbaugh and some of the management team at PokerCentral.
CEO of PrizePicks Adam Wexler tweeted about it saying, "The biggest news week in the last five years of #DFS continues! Excited to publicly welcome investors like @andrewbogut, @JeffGrossPoker, the @PokerCentral crew & a number of other strategics to the @PrizePicks cap table"
Phil Hellmuth is also a shareholder from an earlier fundraising effort. Never one to be left out of a story, Hellmuth quote-tweeted Wexler saying, "I’m on the @PrizePicks Cap Table as well (private DFS company)!! Go [Adam Wexler], go!!"
Money for nothing
The presence of so many poker players with fingers in the pie might suggest PrizePicks is looking to expand into the arena of card games. Online gambling is teetering on the edge of going mainstream in the states. Numerous gambling and poker bills passed on November's ballots.
Wexler has pulled a real magic trick.
Typically, a company would have to pay players like Hellmuth to front for them. That Wexler tricked the Poker Brat into paying him for the privilege is probably the best indicator of this project's likely success.
Though who knows how sweet he had to make the deal on those shares. Having professional, winning gamblers on the board of investors is pretty good publicity, and Wexler well knows this.
DFS to HSP
The full press briefing put out by PrizePicks makes full use of the assumed investment know-how of poker players as a group. "Poker professionals are all-in on premium unit economics when they see them," Wexler is quoted as saying. "We're positioned strategically for 2021 and beyond, and that's in large part due to how we've chosen to align with a savvy and diverse set of equity investors rather than a strict venture financing path due to our sound, profitable business model."
It takes a few more lines of business babble for the press release to come to the point.
"This gives us a lot of flexibility for the future should we choose to expand our brand beyond DFS as FanDuel and DraftKings have [...] these stellar investors will benefit both sides in both the short term and the long term should we move into areas such as sports betting and icasino."
Now the bank of poker investors and sports personalities makes sense. PrizePicks is looking at partnerships like those between Flutter and FanDuel.
Smart partnerships are a big part of Wexler's business model. PrizePicks already has partnered with the Atlanta Braves and Miami Marlins. Great choices for a DFS site. By hooking the PokerGO team, PrizePicks has media access. By hooking Hellmuth, they have a poker star. That looks good to prospective partners, and is good for future expansion.
When they do move into online poker, it will be interesting to see exactly what kind of deal Hellmuth can cut, or if he's already cut something behind the scenes. Expect a flurry of tweets from him whenever that comes about.
Featured image source: Twitter
