FanDuel cashes in on US gaming market

AN ONLINE gaming firm has revealed that it will break into profit this year and double the size of its workforce as it continues to push into the giant American market.

FanDuel, which changed its name from “HubDub” so that it would match the title of its main product, will take its headcount up to 45 this year, with most of its staff based in Edinburgh.

Despite raising $1.3 million (£819,000) just last month from existing investors, including Pentech Ventures and Piton Capital, the company already wants to bring in further funding this year to increase the scale of its US business.

FanDuel is a fantasy sports game that allows online betting but is exempt from the United States’ strict online gambling laws because it is classified as a game of skill, not of chance. Sports covered by the website include American football, baseball, basketball and ice hockey.

The firm’s founders, husband-and-wife team Lesley and Nigel Eccles, said that they want to invest further in the business so they can fight off growing competition.

Nigel Eccles said: “In the UK it is niche, but in the US around 40 per cent of men between the ages of 18 to 35 play fantasy football.”

The pair launched HubDub in 2008 to allow users to bet on the outcome of news stories, with punters predicting the results of the 2008 US presidential election and ITV singing contest The X Factor. They added the FanDuel game in September 2010.

Now the company is seeking bigger offices in Edinburgh, having spent its early years being supported by commercialisation programmes at Edinburgh University. Currently the company is based at the university’s Appleton Tower.

FanDuel also has an office in New York, where eight members of staff are based.

Each week the company pays out $830,000 to winners. FanDuel takes a 10 per cent cut of entry fees, which range from $1 to $500 per player.

Nigel Eccles added: “There are 30 million fantasy sports players in the US. We have converted a tiny fraction of that. Our vision is that this is the future of fantasy sports. Our users are in their 20s, while traditional players are now in their 40s. In ten years’ time, this will be the dominant way of playing fantasy sports.”