Fantasy sports, billion-dollar industry

Fantasy sports leagues may be made up, but the money they attract is real, and growing.
Written by Tyler Falk, Contributor

One in every 10 people in the United States has a fantasy sports team. And while the teams might not be real, the revenue sure is.

First off, for people outside North America who are unfamiliar with fantasy sports, here's a brief overview. The online game -- played by 33.5 million Americans in 2013 -- simulates owning a team in a specific league. Take fantasy football, the most popular fantasy league in the United States. Fantasy team owners join leagues with their friends, co-workers, or strangers and draft players from real NFL teams to play on their made-up teams. Throughout the season those players score points based on how they perform in real games (number of touchdowns, number of receiving yards, etc.) which are used determine the winners of one-on-one match-ups in the fantasy league. During the season owners spend time mulling over their teams deciding who will play each week, proposing trades, and reading blogs about which players should be added to their team. The winner of the league at the end of the season could win bragging rights or cash, depending on the league.

And in the U.S. it's not just a game, it's growing into an obsession.

The average player spends about three hours a week on their fantasy teams, according to the Fantasy Sports Trade Association. The trade group says that more than $3.6 billion will be spent on fantasy sports this year (the most -- 1.7 billion -- coming from league fees). That comes out to an average cost per fantasy sports player of $111 per year.

Another estimate from the market research firm IBISWorld says that fantasy sports platforms are expected to bring in a total revenue of $1.2 billion this year, mostly from advertising. That's revenue that has grown substantially over the last 10 years, as Jordan Weissmann at The Atlantic points out, as broadband and mobile Internet give players the chance to tweak their teams anytime, anywhere. Revenue has grown from $395 million in 2004 to $738 million in 2009 to over $1 billion for the first time last year.

While it might seem like a lot of money for a game, Weissmann observes, "it also speaks to the power of legalized gambling," as fantasy sports are legal under U.S. online gambling law.

Photo: Flickr/derektor

This post was originally published on Smartplanet.com

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