DraftKings Reportedly Spent Millions of Dollars to Pay Out Guaranteed Prize Pool

September 16, 2016   ·   Alec Nathan   ·   Jump to comments

DraftKings—a daily fantasy sports platform—was forced to pay millions of dollars in prize money out of pocket following Week 1 of the NFL season after it failed to generate enough entries to cover winners' guaranteed earnings.  
Citing industry sources and high-volume players, ESPN.com's David Purdum and Don Van Natta Jr. reported DraftKings had to pay somewhere between $2 million and $4 million to compensate for the smaller sum generated by entry fees. 
A DraftKings spokesperson told Purdum and Van Natta the $4 million figure was "grossly exaggerated" and that the expenditures paid out of pocket were considered a "marketing expense."
"It was a tough weekend, a very soft weekend, and it ended up being a costly one," a longtime industry insider close to DraftKings told ESPN.com. "The timing couldn't have been worse."
All told, Purdum and Van Natta reported at least 16 of DraftKings' biggest prize pools were not fully compensated by entry fe...

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