Sunday, March 23, 2014

MGT To Provide VegasInsider.com Fantasy Sports Skin

Last week MGT, the majority owner  (65%) of FanThrowdown.com - a daily fantasy sports contest website - partnered with vegasinsider.com to provide a 'white label' fantasy sports 'skin'.

Press Release

Basically, VegasInsider will be able to offer a daily fantasy sports website (similar to Fanthrowdown.com), under the VegasInsider brand. MGT will provide the software, support and shared player pool (we assume). Essentially MGT is establishing themselves as a possible network hub for other sites that want to do the same thing.

Daily fantasy sports contests benefit with larger player pools, and allows the sites to run more generous promotions to attract & retain current players. Similar to social games on facebook and online games like poker or World of Warcraft - the more players that play - the more profitable it can be to the company who offers the games.

Of all the recent announcement by this company, including 'inking' two 'top' daily fantasy sports players, an angry letter from an investor, and the owner of FanThrowdown allegidly being a sex offender - this is one of the more interesting moves this company has made with this brand. If there isn't a tremendous amount of additional CapEx partnering with VegasInsider - MGT's FanThrowdown.com benefits with additional players, while compensating VegasInsider the same way they reward users who refer new players to the site.

Overall, seems like a win-win for everyone involved. While there are still many questions surrounding MGT and FanThrowdown, the company is making attempts to grow the brand that can be perceived as positive for FanThrowdown. The management's willingness to dilute shareholders has me on the sidelines, but this speculative stock is showing some signs of trying to grow this area of the business.

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