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Our value prop is simple. We offer sports fans a way to compete against friends or strangers in daily fantasy leagues for cash prizes. Invite a friend or get matched up head-to-head; the best stats win the cash prize. Choose any 5 players from today ’ s game. - PowerPoint PPT Presentation
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September 2013 - Confidential - Do not distribute
Confidential - Do not distribute 2
Our value prop is simpleWe offer sports fans a way to compete against friends or strangers in daily fantasy leagues for cash prizes
Choose any 5 players from today’s game
Select entry level and prize amount
Invite a friend or get matched up head-to-head; the best stats win the cash prize
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Optimized for every device
The experience is the same across devices…
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Product demonstration: NFL
View a Demo at: http://bit.ly/16jbVJ2
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Recipe for success
Real traction and success from bootstrapped prototype
Organic private beta launch for March Madness and NBA playoffs with 1k users and yielded the following results in 30 days with no marketing
•2,652 successful transactions, 1,326 successful challenges between users
•$44,390 total transaction volume
•$2,720 of revenue; $1,104 of revenue after 11 days
•$2.72 Average Revenue Per User
•$16.73 average transaction amount
•Largest “whale” handled $10,934 resulting in $656 revenue for FC
•125 of 1,000 customers with over 10 transaction fees
•Happy and loyal customers!
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Business Model
Lucrative business model with no risk 5% - 10% earned from each transaction with no assumed risk
Stakes Entry Fee Total Prize $ FC’s cut
High $525 $1000 $50
Medium $105 $200 $10
Low $2.20 $4 $.40
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Sizing up the market
The market is BIG…and we’ve only just hit the tip of the iceberg.
How big? •It’s estimated that in 2012, +32M Americans spent approximately $467 each, or about $15B in total playing.*•To put this in perspective, football accounts for $11B of that total. The NFL made $10B over that same period.•50% of the population plays a March Madness Bracket•$380B of illegal sports bets are placed yearly in the U.S.Iceberg you say? •Yep, it’s growing at a clip of +60% over the past four years.*•Federal exemption for fantasy sports. •The market for daily, skill-based games is ready to explode.
*Fantasy Sports Trade Association
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Competitive landscape
Fan Duel
DraftKings
Starstreet
Draftstreet
Yahoo Fantasy Sports
ESPN Fantasy Sports
Fantasy Sports – Cash Prizes
CBS Sports
We Are Uniquely Positioned To Win
Attacking new greenfield opportunities at the intersection of online/offline gaming
Attacking new greenfield opportunities at the intersection of online/offline gaming
Differentiated from other Daily P2P sites by simplicity and ease of use
Differentiated from other Daily P2P sites by simplicity and ease of use
Nevada Casinos w/ Sportsbook
Sports Betting – Real Money
Nevada Casinos w/o sports book
Gaming entities outside of Nevada
Sports bar & restaurants
1122
Focus on Friend vs Friend &
Rematches
Focus on Friend vs Friend &
Rematches
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What’s next
Phase 1 - Complete
Daily Leagues in 45 States•Federal & 50 state legal reviews
•Mobile accessible for all devices
•Launched private Beta for NCAAB
•Built multi-sports platform
•9 Patents filed, including:
‐ P2P poker, slots, casino games
‐ Real money fantasy leagues around video gaming
Phase 2 - Underway
Distribution partnerships•Launch NFL, NCAAF, NBA, NCAAB
•Co-branded or partnerships with:
‐ Casinos & gaming entities
‐ Media companies
‐ Social media influencers
•Challenge Friends & Rematch Opponents
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Creating Value for Channel PartnersThere are 216 sports books in Nevada casinos.1 Smaller casinos and casinos outside of Nevada are not generating revenue from sports wagering because of legality, expense or risk.
*As of June 30, 2012
Current “status quo” for Casinos
•Consumer revenue falling from competition
•No inter-state revenue from sports
•Traditional email and mail marketing
New Casino positioning w/FC•Fantasy “sports book” revenue at a small fraction of the expense and risk
•New sports-based draw
•Inter/intra-state revenue from online
•New, more effective ways of reaching patrons via social media
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Turn key revenue stream & valueFC enables venues to create new social, sports-based draws at a small fraction of the cost it would take to build a sports book.
Product & Customer Support
Connected with FC users across the U.S.
$$ $$
$$$
$Social Media Integration
Kiosks On-Site
Co-Branded Website
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How we’re going to grow
Confidential - Do not distribute
User Acquisition ChannelsWeb •SEO, Advertising, buy traffic, freeroll•Virality built in: design promotes social sharing and competition•Social media & celebrity endorsements via Twitter, Instagram, Facebook influencers and sports related celebritiesCo-marketing with Channel Partners i.e. sports bars, on/off-line media, casinos and gaming entities, brands, sports focused websites•Foot traffic•White label/co-branded web presence•Traditional affiliate marketing
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Revenue Projections
Confidential - Do not distribute
4 Year Projections Year 1 Year 2 Year 3 Year 4
Users 92,214 491,200 1,447,446 3,537,935
MARPU $2.70 $4 $5.50 $6
FC 65% 50% 30% 20%
PARTNERS 35% 50% 70% 80%
Revenue $1,463,634 $16,045,809 $68,317,995 $190,853,673
FC 75% 65% 50% 20%
PARTNERS 25% 35% 50% 80%
Expenses ($2,220,469) ($11,020,193) ($32,737,533) ($79,017,755)
COGS ($900,300) ($2,587,077) ($3,854,802) ($4,750,229)
SOFT ($1,320,169) ($8,433,117) ($29,066,376) ($74,503,822)
Profit ($756,836) $5,025,616 $35,580,461 $111,835,933
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Our team
Adam “Ace” Lee, Co-founder/CEO•Sports Tour and Merchandise Company with Seattle Mariners•Visionary in Online Peer to Peer Gaming•Developed and owned over $25M of real estate
Doug DeLuca, Co-founder/Biz Dev & Strategy•Co-Executive Producer, Jimmy Kimmel Live•Connected to major brands and influencers•Former CEO of EliteXC (bought out by Strikeforce/UFC)
Confidential - Do not distribute
Dan Shupp, Free Range Technology •SF-based development shop with operations in Asia•Agile and scrum development system
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Investors & advisors
Adam ShawExecutive
NFL, FOX, CAA
Neal LenarskyChairman
STI Management
Victor LeeVP Digital BrandingHasbro
Chris PetrovicExecutive
GameStop, BetFair, Playboy
CEO Riviera Las Vegas, Wynn Executive in
Macao
Andy Choy Vik LakhwaraExecutive
Reinventures, SK telecom
ventures
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Next Steps
InvestorsWe’ve accomplished a lot with $125K:•Built a strong core team and advisory board•Successfully launched private beta, proving out the MVP with revenue and users•Filed patents in verticals surrounding our core patent
Now we are looking for $1M to knock it out of the park:•Key hires (CTO, Channel Sales/BD)•User Acquisition – Target 100K users with $10 MARPU•Build channel partnerships with venues•Position FC for future phases – P2P Casino
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Appendix
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Appendix: Market size
Market by the numbers:
• Fantasy sports generated $3B - $4B of revenue in 2012
• Nevada’s legal sports wagering represents < 1% of all US sports betting
• Gross revenue for Nevada’s sports books was $170.0m in 2012 on $3.45B of wagering
• The illegal US sports betting market is $380B yearly and $19B in revenue
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Appendix: Player Acquisition
We’ve developed a pipeline of media partners that reaches an audience of more than 1.5M via social media e.g. Twitter, Facebook, and Instagram. • Leanna Decker – Model, Blogger
• Brittney Palmer – Model, Blogger
• Bert Fentress – Fantasy Sports Guru
• @blackredsoxfan – MLB Pro Blogger
• @rotofanatics – Fantasy Sports News
• @mlbinjurynews, @hoopsinjurynews – Sports injury news and updates
• Chris Myers – Fox Sports announcer covering NFL, MLB, and Nascar
• @fantasycouch – Fantasy Sports Guru
• Lysette Tan – Blogger, Model
• Kourtney Reppert – Model, Blogger
• Sophia Santi - Model, Blogger
• Sports Media 101 - 120 micro blog sites
• Jordyn Taylor – Singer, Blogger
• Sports Fan Addicts Sports Bar, Honolulu - Bar
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Appendix: Legal
Fantasy sports is considered a game of skill and received specific exemption from the 2006 Unlawful Internet Gambling Enforcement Act.
Additionally, Fight Club has gone further to ensure the legality of its services and compliance with federal and state laws by conducting:
•50 State legal review by recognized gaming expert Tony Cabot showing strong legal standing in 45 states
•Federal legal review by I. Nelson Rose
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Appendix: Market activity
The fantasy sports and gaming industry has been brimming with activity.Select Recent M&A Activity:
•Bignoggins acquired by Yahoo! – July 2013
•Double Down Casino acquired by IGT for $500M – January 2012
•Playtika/Slotomania acquired by Caesars for $160M to $180M – January 2012
•BetFair successful, $2.4B IPO (UK) – October 2010
Select Recent Financings:
•Topline Games $25M Series A – June 2013
•DraftKings $10M Series A & PE – May 2013
•FanDuel $11M Series C – January 2013
•Starstreet $600K Angel/Series A – February 2012
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Appendix: Patents filed
Patent Description Impact
Utility application #: 13843750Filed March 15, 2013
• P2P Casino - Allows users to play casino games peer to peer with one user acting as house and another user or users acting as players.
• Removes the house and allows for a transparent, profitable, peer to peer platform.
Patent Application #: 61827447Filed May 24, 2013
• P2P Backyard – Allows users to place and lay bets simultaneously in casino games
• A fluid table with true odds and no need for a house
Patent Application #: 61827431Filed May 24, 2013
• P2P Slots – Allows users to pick a slot machine, bank it and open it for other users to play. 100% payout.
• Allows user to play on both sides of the slot machine experience, users gets true odds
Provisional Reference #61816698April 26, 2013
• Multiple Sportsbooks - Allow sports book to display multiple sports book feeds and lets players bet on any feed from one or multiple accounts.
• Best odds on all sports bets for a player. House can lay action to other sports book.
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Appendix: Patents filed (cont’d)
Patent Description Impact
Application #61869457August 23, 2013
• P2P Video Poker – Allows a user to bank a video poker machine and lets a user play the machine against the player acting as ‘bank’.
• Allows users to bank a video poker machine and leave it open, or play for true odds against another user.
Application #61871872August 30, 2013
• Forming a fantasy video game team and competing against another user’s team for cash
• Monetize the huge amounts of traffic that is generated by video game players
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Appendix: Web assets
List of Domain Names
• FightClub.com• Pick5.com • P2Pgambling.com • P2Pcasinos.com• P2Pcraps.com• P2Pslots.com• P2Pbaccarat.com • P2Proulette.com• P2Pkeno.com• P2Pbingo.com• P2Ppaigow.com