This is a guest contribution by Jonas Odman, former Bodog Poker President. If you would like to submit a contribution please contact Bill Beatty for submission details. Thank you.

There are many similarities between Daily Fantasy Sports and poker, in particular poker tournaments. Both are peer-to-peer games with a mix of skill and chance and as an operator, you need to make sure you have a healthy player ecosystem. There are also similarities between the online poker boom back in 2004-2006 and the current DFS boom in the U.S.

But there are also differences. While online poker companies were making a ton of money pre-UIGEA, the two DFS giants, Draft King and Fan Duel, both prioritize market share over profitability and spend crazy amounts of money on TV advertising. Party Poker, the most aggressive media buyer during the poker boom, was very profitable. In 2005, Party made a profit (EBITDA) of almost $600m.

I think it is likely that an equivalent of UIGEA will shut down the DFS market in the U.S. at some point which will make this expensive fight for market share look even more questionable. I foresee that the DFS boom will be called the DFS bubble, and rightfully so.