For the first time, a sports tech company is offering cryptocurrency as an award in a consumer promotion. It’s a clever move for FanDuel’s bottom line.
The outlook for FanDuel actually turning a profit in 2018 might improve if it can come up with creative ways to attract paid entries. A new promotion announced on Wednesday fits that bill.
FanDuel debuted a free, single entry contest for the NFL Wild Card weekend, called the Bitcoin Bowl Free Play. Capped at 999,999 entries, the top scorer in the game will collect as a prize one Bitcoin. For those unfamiliar with Bitcoin, it’s a digital currency in which encryption techniques are used to regulate the generation of units of currency and verify the transfer of funds, operating independently of a central bank. In simpler terms, it’s a electronic currency that isn’t tied to any political state like nearly all physical forms of currency are.
In addition to the free play, which sat at just over 105,000 entries at 5 p.m. EST on Wednesday, Jan. 3, there is a separate but similar paid-entry game called the Bitcoin Bowl Tournament. The cap on that game is a similar 999,999 $3 entries, but it is a multi-entry game. First prize for that game is two Bitcoins, while second prize takes home half of a Bitcoin and third and fourth places receive a quarter of a Bitcoin.
Both contests lock on Saturday, Jan. 6, at 4:35 p.m. ET, and if the current rate of entry continues, figure to be full by then. The contest will end with the close of the last NFL Wild Card game on Sunday, Jan. 7. It’s the value of Bitcoin at that time that will have the most significance for both contest entrants and FanDuel.
Bitcoin fluctuates in value based on bidding on exchanges, similar to stocks. As of 5 p.m. ET on Wednesday, a Bitcoin was valued at just over $15,000. Assuming that there isn’t a tremendous amount of fluctuation, it’s possible to see how this could work out very well for FanDuel.
A total of 999,999 paid entries in the tournament would be almost exactly $3 million in revenue. The payout at the current rate on both games would be worth about $60,000. That would give FanDuel a profit of $2.94 million, minuses any expenses incurred with the promotion and operation of the games.
One of the greatest challenges for companies like FanDuel has been turning a profit. With creative ideas like this, that problem may dissipate.