FanDuel signs deals with 15 NFL teams, escalating daily fantasy integration

As recently as two years ago, American pro sports leagues seemed downright afraid of daily fantasy sports.

There were just too many questions. Were they a new form of sports betting? Was it even legal?

But then came the revolution. Money opened the minds of the major leagues, uncorking a digital gold rush that includes the latest big industry splash: FanDuel, the nation's biggest daily fantasy sports company, has signed multi-year sponsorship agreements with 15 NFL teams.

"It's amazing," Nigel Eccles, FanDuel's CEO, told USA TODAY Sports in announcing the deal. "It's surprised us how quickly everything has moved."

The deals mark the latest proof that pro sports leagues are rapidly integrating with an industry that many have compared to their longtime bogeyman — sports gambling.

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Consider:

DraftKings — FanDuel's primary competitor — recently expanded its exclusive partnership with Major League Baseball and has emblazoned its logo throughout several stadiums this season, including behind home plate and on the centerfield wall.

Now the NFL has opened its door even more, allowing teams to sign multi-year deals with these companies for the first time. Last year, the league didn't allow advertising from daily fantasy sports companies until midseason, with only a few teams signing marketing deals with them.

This year, FanDuel has signed up about half of the league's teams with deals that generally include stadium signage, radio and digital advertising and other promotions in exchange for an undisclosed amount.

The catch is that the NFL isn't jumping in with both feet — at least not yet.

For example, the league has placed restrictions on these deals that are similar to the league's rules for team advertising deals with casinos. NFL team logos won't be allowed in FanDuel advertisements or on the FanDuel website. The company also won't be allowed to be identified as an official NFL or team sponsor, unlike Bud Light, whose beer cans have featured NFL team logos.

The reason for these restrictions is that the "daily fantasy marketplace is in its infancy," NFL spokesman Brian McCarthy said.

McCarthy also said these companies are not considered team sponsors.

"A team sponsor is a company that can use the team logo or say, 'We are the official (company) of the team,'" McCarthy said in an e-mail to USA TODAY Sports. "That is not the case here. These companies are not team sponsors. Officially or unofficially. They do not have any designations. Teams have advertising arrangements from a variety of companies, but that doesn't make every one of them a team sponsor."

FanDuel's exposure in the NFL still will be greatly enhanced, including having a FanDuel lounge at FedEx Field for Washington Redskins' games this year.

FantasyScore, another daily fantasy sports site, is a partnership between USA TODAY Sports Media Group and RT Sports.

`NOT A GAME OF CHANCE'

The leagues recently "got religion" about daily fantasy sports, Eccles said.

Before that, they were much more spooked by it. Not only was it a new industry, but it was industry fueled by daily transactions that resemble sports wagers.

And that's what made the leagues nervous.

In exchange for an entry fee, daily fantasy sports companies generally offer fans a chance to win daily cash payouts based on the statistical performance of athletes in games that day. FanDuel, for example, advertises "instant payouts" and more than "$10 million in real cash prizes paid out every week."

The leagues historically have opposed traditional sports gambling because they worried it would corrupt their sports. Federal law also forbids state-sponsored sports gambling in most U.S. states outside of Nevada.

Similarly, five states have laws that prohibit or are unclear about fantasy sports games that are played for cash prizes: Arizona, Washington, Louisiana, Iowa and Montana.

But federal law protects paid fantasy sports under certain conditions, including having it reflect "the skill of the participants," as opposed to pure luck or chance like traditional gambling.

Major League Baseball even hired a consultant to scientifically evaluate it "to make sure it was a game of skill and not a game of chance," said Bob Bowman, president of business and media at MLB.

RIDING THE ROCKET SHIP

The leagues have had at least two big reasons to join forces with these surging companies in an even deeper way.

With their easy-to-use apps, the companies appeal to the young and mobile sports fan.

"It increases the engagement of our fans in the game," said Mitch Gershman, the Redskins' chief marketing officer. "We also know the (daily fantasy) players skew a little younger. We are broadening the fan base to have interest in NFL football."

More importantly, they juice the golden goose of pro sports — lucrative television and media rights deals. That's because fans with money at stake in daily fantasy sports are more inclined to watch more games on television than they otherwise would. The more people watch live games every day, the fatter the goose grows.

Such synergy has led the leagues and networks to buy into these companies, including ESPN, which reportedly has agreed to make a significant investment in DraftKings.

"That signals that the flood gates are not just open, but they are gushing," said Reed Bergman, CEO of Playbook Inc., which negotiates sports marketing and endorsement contracts.

Last year, the NBA announced it had bought a stake in FanDuel. In 2013, Major League Baseball also made a small equity investment in DraftKings, but that wasn't even publicly revealed until recently, almost like a courtship that was kept quiet.

MLB "always recognized the potential, but given the newness of the space and the youth at the time of DraftKings, we all agreed that we'd proceed hand-in-hand, but slowly," DraftKings CEO Jason Robins told USA TODAY Sports.

They're not going as slowly now. DraftKings has active signage at 18 MLB stadiums this season, the company said.

By contrast, the NFL still is "taking a more conservative approach," said Eccles, whose company was founded in 2009. Unlike MLB and the NBA, the NFL doesn't have a league-wide deal or equity stake in these companies.

McCarthy said such a deal is not under consideration. He said NFL teams are not allowed to have ownership stakes in such companies, though team owners can.

FanDuel and DraftKings say they have raised at least $88 million and $75 million, respectively, after closing big investment rounds last year.

"The growth itself is not surprising," said Robins, whose company was founded in 2012. "However I don't think anyone could have anticipated the speed. We expected a jet plane and instead got a rocket ship. It's testament to the mass appeal of daily fantasy sports and its unique positioning at the intersection of sports and technology."

DraftKings says it has deals with five NFL teams, along with the National Hockey League and the Ultimate Fighting Championship.

The new FanDuel team deals are with the Redskins, Buffalo Bills, Cincinnati Bengals, Cleveland Browns, Tampa Bay Buccaneers, San Diego Chargers, Indianapolis Colts, Philadelphia Eagles, Jacksonville Jaguars, New York Jets, Detroit Lions, Green Bay Packers, St. Louis Rams, Baltimore Ravens and Houston Texans. A deal with the Chicago Bears also is expected soon, giving FanDuel 16 NFL team contracts.

Bruce Popko, an executive for the Bills, said FanDuel's "in-stadium presence is going to be fairly significant … with heavy digital play." He said the team also will be promoting FanDuel's free games to its database of customers.

"It's a huge step up for us," Eccles said.

Follow sports reporter Brent Schrotenboer on Twitter @Schrotenboer. E-mail: bschrotenb@usatoday.com