Fantasy eSports site AlphaDraft will close down tomorrow, according to an email to customers by owners FanDuel. The site will be a loss to the eSports scene, as they sponsored a number of teams and tournaments.
Ah, but what do they bet on? Some of the best multiplayer games on PC, that's what.
Fantasy eSports works similarly to fantasy “real” sports, in that customers choose an eSports tournament, pick a "fantasy" team of competitors from a list of pro players, and win money based on the performance of their team in real life.
Until quite recently, fantasy eSports were booming, and sites like AlphaDraft were drawing the attention of wealthy investors. FanDuel, one of the largest daily fantasy sports companies in the industry, were so confident in the fantasy eSports scene that they bought AlphaDraft in September 2015.
Unfortunately, the acquisition was almost perfectly mis-timed. The very next month saw a ruling by the Nevada Gaming Commission that daily fantasy sports (DFS) should be considered illegal gambling, and ordered FanDuel and rival DraftKings to stop operating in the state. Several other states followed suit in considering the legality of DFS, including fantasy eSports. Currently, DFS are banned in five US states, with regulatory legislation pending in several more.
FanDuel's email is short on details, but mentioned an evaluation of "the current eSports landscape" as the key factor in their decision to close. This is reminiscent of the closure of AlphaDraft's rival, Vulcun, in January this year. At that time, Vulcun posted a statement on their blog saying "the current legal landscape in the United States has made this difficult."
With a smaller market in eSports and the same vulnerabilities to legal issues faced by the mainstream sites, it’s small wonder that fantasy eSports sites are suddenly struggling.