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How FanDuel grew from humble Scottish startup into an American fantasy sports giant

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Raymond Maxwell
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The daily fantasy sports DFS industry has taken one hell of a beating these past seven months, with states from New York and Illinois to Nevada concluding that betting on virtual sports teams compiled from real pro and college athletes isn t a game of skill after all — it s illegal gambling.The two most prominent players in the saga have been Boston-based DraftKings — founded in 2011 and with $445 million in VC cash to its name so far — and FanDuel, which has raised north of $360 million in financing since its inception in 2009.

And this surely can t be good for business.

In FanDuel s latest annual report, announced just this week, auditor Deloitte highlighted the uncertainty created by this situation:Despite legal challenges, FanDuel has confirmed it has suspended operations in both Nevada and New York, which surely doesn t bode well for its bottom line.

The loss of turnover in the states in which the group has suspended operations pending further legal clarity represents less than 20 percent of total turnover for the 18 months ended June 30, 2015, he said.FanDuel s predicament helps highlight how much can change in a year.

Though the company received VC investment in its former incarnation, Hubdub closed in 2010 to focus all its efforts on a separate product it had launched a year earlier — FanDuel.

Noting that sports was one of the most active categories on Hubdub at that point, and fantasy sports in general was a significant market, Eccles and co. scanned existing fantasy sports products and concluded it had room for improvement.

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Raymond Maxwell
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