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5 Companies Through Which You Could Invest In Daily Fantasy Sports

Daily Fantasy Sports is a hot emerging industry that is attracting lots of venture capital.

A recent adverse Nevada ruling will rein in valuations a bit.

If you believe in the long-term prospects of Daily Fantasy Sports, this could be a good time to look at opportunities.

It is not easy to find Daily Fantasy Sports operators that are publicly traded, but I've identified five.

The hot emerging industry of Daily Fantasy Sports - DFS for short - has cooled off a little bit as Nevada regulators put on the brakes. In Daily Fantasy Sports games, players put together a team of athletes from a daily slate they expect to perform well in the actual game. Players pay a small entry fee and those who have selected a particularly successful team are paid out a multiple of their investment. The game is carefully designed as not to be considered gambling, but it is has a lot of similarities to it. The largest operators are FanDuel and DraftKings which benefit from something of a network effect because they have the biggest player bases, and consequently, the largest prize pools, which are powerful tools to attract players. Disney (NYSE:DIS) has invested $250 million in DraftKings, while Comcast (NASDAQ:CMCSA) (NASDAQ:CMCSK) has invested in FanDuel. Unfortunately, the two largest operators in this space are private companies. You can own them indirectly through these large media conglomerates, but the exposure you will gain through that indirect investment would be negligible. There are several interesting publicly traded companies that are active in the sector. I will list them in no particular order.

Yahoo (NASDAQ:YHOO) entered the DFS space this summer with a website that is very similar to FanDuel's. Yahoo currently has a market cap of $32 billion. That means the exposure you will get through buying into Yahoo is limited. However, Yahoo is currently planning to spin off its stake in Alibaba (NYSE:BABA), and after that has happened, things will look very different. Yahoo most likely got into DFS because of...


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