October 23, 2015

Sixers, PartyPoker end partnership amid daily sports fantasy surge

The Philadelphia 76ers and PartyPoker have ended what both sides said in 2014 was a groundbreaking partnership between an NBA team and an online gambling business.

Sixers CEO Scott O'Neil confirmed Wednesday night that the partnership had ended, but declined to explain why the two businesses parted ways, other than to say that even multiyear partnerships such as this one have "triggers" that allow for "adjustments based on market opportunity."

Someday, sports gambling - online and otherwise - might be a hot market opportunity nationally, as it is in Las Vegas now and in other countries such as the United Kingdom.


But today, the hot sports market opportunity is the explosion of advertising and attention devoted to daily fantasy sports - and the Sixers were the first NBA team to sign a sponsorship deal with DraftKings, a fantasy-sports operator.

In fantasy sports, people choose real players for an imaginary team. Points are awarded based on the real statistics of real players.

Along with FanDuel, DraftKings has spent millions on advertising on television screens, social media, billboards and other places capable of displaying their name. In recent days, the AT&T SEPTA station, which is where fans get off to watch all four Philadelphia teams, was plastered with DraftKings advertising.

Sixers owner Josh Harris also owns the New Jersey Devils of the NHL and the Devils' home arena, the Prudential Center in Newark. O'Neil serves as CEO of the company that overseas all three operations.

The PartyPoker deal remains as is with the Devils and the Prudential Center.

PartyPoker gained approval to run online gambling - not involving sports - through casinos in Atlantic City in 2015.

On Jan. 9, 2014, at a news conference in Newark, O'Neil announced the deal with PartyPoker's parent company, Bwin.Party Digital Entertainment Plc.

"This is our flag in the ground that we do things differently," O'Neil told Bloomberg News on the day of the announcement. "We're looking for groundbreaking opportunities with companies willing to take chances."

In a statement issued that day, Norbert Teufelberger, CEO of Bwin.Party Digital Entertainment, said, "We are excited to be working with the Devils and 76ers and to be able to offer their fans great digital content and unique game-day experiences. They are two of the most iconic names in American hockey and basketball with huge and loyal fan bases throughout New Jersey and the surrounding metropolitan areas. There is an affinity between playing in online poker tournaments and sports - winning is about having intense focus, stamina, and a great competitive spirit."

Bwin.Party could not be reached for comment Wednesday night.

What changed in less than 12 months is that daily sports fantasy exploded in the United States.

In December 2014, the Sixers announced that DraftKings would become the "presenting partner" of several of the team's digital platforms, including the official website, newsletter, mobile app, and radio broadcast.

On Feb. 2 of this year, DraftKings and PartyPoker were part of a Sixers contingent that rang the opening bell to start trading on the Nasdaq stock exchange. But PartyPoker is not part of the Sixers' sponsorship lineup for the 2015-16 season that starts Wednesday.

Meanwhile, the daily sports fantasy surge has prompted debate about whether it is any different than gambling, which is prohibited in all but four states and meaningful only in Nevada. The Justice Department and other authorities are looking into FanDuel and DraftKings, though the area has little in the way of regulation.

Also, PartyPoker's parent company, Bwin.Party, was sold in September to GVC Holdings for $1.4 billion. Speculation in the online gambling media is that GVC might sell PartyPoker to Amaya Gaming, a Montreal-based company that owns PokerStars and Full Tilt Poker. Amaya also has a sports fantasy division called StarsDraft. Amaya said recently StarsDraft will operate in only four states, one of which is New Jersey.

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