Key strategic partnerships can take this daily sports provider to new heights
SmallCapPower | April 28, 2016: Is it legal or is it illegal? Is it a game of skill or chance? It’s a question that is more difficult to answer than it seems. The world of daily fantasy sports has been under much scrutiny by the United States legislature.
However, the daily fantasy sports industry is starting to see better days, at least in legislative terms. According to Legal Sports Report, Mississippi joined Tennessee, Virginia and Indiana in moving a bill to regulate and legalize the industry. The Fantasy Sports Trade Association projects that 7-10 States will fully pass the law in 2016, 4 of which having done so already. By 2018, the industry will be entirely regulated and operational in 35-40 States.
What novice investors tend to do, which can really hinder their investment decisions, is investing with their emotions. When the media floods fear-triggering headlines we start questioning our investment decisions. Investors shouldn’t be so quick take headlines at face value and should really start questioning them.
Fantasy Aces has been pulled into the legal whirlwind of the big two daily fantasy sports providers, DraftKings and FanDuel. But I want to strip out all the macro issues of the industry and really look at FAS and how the company itself has done.
When I look at the company I see a business that grew in 2015 and is continuing to grow into 2016 even with all the issues.
Financial results for fiscal 2015, ending December 31, 2015, saw an increase in revenue of 650% from 2014. With prize payouts that totalled more than $17,900,000 during the year, that is an increase of 620%. The company also saw its user base increase by more than 265%. These numbers clearly indicate that Fantasy Aces is still growing and there is still a market for daily fantasy sports regardless of legislative issues.
The company announced recently that it raised over $1.4 million. The most impressive part of this, is to note that its management team invested $455,000 into the financing. Talk about ‘skin in the game’. It is always a good sign when management invests in their own business because they are the ones that know the business best.
With the addition of key partnerships, it will also allow FAS to expand and grow their operation.
The company announced back on February 5, 2016, that it signed a strategic marketing agreement with FA Media, LLC (Fantasy Alarm). In the last financing FA Media LLC subscribed in the amount of $525,000, which is equivalent to 21,000,000 shares. Therefore, they currently own more than 14% of FAS. What this really means is FAS got an injection of cash into its marketing budget.
FA Media has a rapidly-growing user base. It also has a proven track record of driving significant traffic to its Daily Fantasy partner’s platform. All this combined, proves that it is a great partner for FAS.
Another noteworthy agreement that the company signed recently is with Cameron Thomson Group (CTG). 
CTG is a leading service provider to the media and gaming industry. The partnership will allow FAS to achieve its corporate objectives for strategic positioning and global expansion. The CTG group will lead the way for FAS to enter and develop, in markets outside of North America.
Roy Thomson, President of Cameron Thomson believes, “…with pending attachment of internationally interested new users, will grow shareholder value appreciably in the future.”
These key marketing partnerships will allow FAS to really gear up its marketing initiatives, but significantly reduce its marketing costs compared to previous years.
And, if all that wasn’t impressive enough, the Company is launching a FantasyAces iOS App.
Trent Frisina, Creative Director at FAS, stated, “We are really excited about the highly-anticipated release of the FantasyAces iOS App. This will meet the needs and demands of thousands of members that have been banging the drum for an App to use for their gaming experience. There are several really cool features on the App that we believe our members will love and this will only enhance our profile in the daily fantasy sports sector.” I was given the opportunity to use the App in its beta stage and it was user friendly with great features to really track your team’s performance.
Watch Exclusive Interview With Tom Frisina, CEO and Trent Frisina, Creative Director of Fantasy Aces Daily Fantasy Sports Corp. With all that being said, when a new industry emerges and proves to be a lucrative one, it is natural for others to want a piece of the action. The daily fantasy sports space is currently dealing with a significant blow, there is no doubt about that, but I believe the sports betting industry is here to stay. The market potential is huge. There are 186.4 million sports fan in North America and only 30 percent of them are currently playing fantasy sports. That leaves 70% of the attainable market up for grabs. With that being said, is this the turning point for FAS? Only time can tell.
To find out more about Fantasy Aces Daily Fantasy Sports Corp., please visit the company’s Investor Hub.
Ubika Research/SmallCapPower has received compensation from Fantasy Aces Daily Fantasy Sports Corp to provide analyst research coverage. For full disclosure please visit here >