DraftKings Announces Partnership with Esports Giant FaZe Clan

DraftKings announced a massive partnership with FaZe Clan, one of the biggest esports companies in the world, on Wednesday. The deal will help both companies reach new audiences and expand upon the intersection of esports and gambling. Mark Insight Reports expects the esports gambling industry to grow to about $13 billion by 2025. The UK Gambling Commission released a report showing year-over-year growth of 2992% in the esports industry. DraftKings is hoping to capitalize on this growth while FaZe Clan will profit from the sports betting titan’s stellar reputation and diverse offerings.

What is FaZe Clan?

As per its release, FaZe Clan is a “digital-native lifestyle and media platform rooted in gaming and youth culture, reimagining traditional entertainment for the next generation.” In layman’s terms, FaZe Clan is an esports company that produces content across a wide range of media platforms and has its own teams that compete in the largest tournaments in the world.

In 2020, Forbes valued FaZe Clan as the fourth-most valuable esports company globally at $305 million. That valuation will have only increased since then as FaZe Clan reported its revenues have increased from $40 million in 2020 to $50 million in 2021. With an estimated global fan base of 345 million, FaZe Clan is one of the most popular esports teams in the space.

FaZe Clan is currently attempting to take the company public through a special purpose acquisition company (SPAC) which would value the company at $1 billion. The SPAC approach is more appealing than the traditional IPO as it would allow FaZe Clan to go public faster and capitalize on what could become a “meme stock” with significant early investor interest.

What Will the Partnership Entail?

The partnership between DraftKings and FaZe Clan will include a variety of activations for the two companies. DraftKings will appear across the FaZe Clan digital content ecosystem, including plans for a new podcast, live stream, tournament events, and other custom content sponsored by DraftKings. In addition, DraftKings will become the official sponsor of FaZe Clan’s Counter-Strike: Global Offensive team with a team jersey logo.

DraftKings will also offer custom contests, merchandise, pools, and tournaments through its platforms. DraftKings currently offers daily fantasy contests for esports ranging across Call of Duty, Counter-Strike: Global Offensive, Dota 2, League of Legends, Rocket League, and Valorant. The partnership with FaZe Clan also includes plans to cooperate on responsible gaming education initiatives.

Matt Kalish, president of DraftKings North America, spoke to the power of a crossover between FaZe Clan’s “tens of millions of viewers and followers” and the robust DraftKings platform and called it a “natural alliance.” DraftKings hopes to create “excitement, competition, and community around sports and video games for adult audiences everywhere [they] operate.”

The only previous partnership DraftKings had in the esports space was with DRIVE, a venture capital company, and it’s safe to say this FaZe Clan deal will have a much larger scope. Financial details of the partnership have not yet been released. Still, we can expect this partnership to be worth a significant amount of money and help boost FaZe Clan’s valuation for its beginning as a public company.