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Two local companies, StarStreet and DraftKings, prepare to launch new fantasy sports sites

Posted by Scott Kirsner  February 27, 2012 03:30 PM

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Two local start-ups are getting ready to launch sites that will let sports fans assemble a new fantasy sports team each day, and potentially win money based on that night's results. It's part of new wave in the online fantasy sports realm that most call "daily fantasy," geared to those who might not have the free time or attention span to stick through an entire season.

"There are probably 15 or more players in the daily fantasy space," says Jeremy Levine, founder of Somerville-based StarStreet, mentioning sites like DraftStreet, FanDuel, and DraftDay.

StarStreet, which has up to now operated a fantasy stock market where traders use real money to buy shares in professional athletes, is launching its daily fantasy site Tuesday at noon. Levine says the company is focusing on basketball first, with plans to do baseball next. Users play head-to-head against other users, and they can do so for free, or by putting anywhere from $1 to $50 into a pool. "Let's say you want to put in $10," Levine says. "We add a 7 percent commission, so you're paying $10.70, but you have a chance to win $20." This kind of online wagering is legal because fantasy sports are considered a game that requires skill, rather than a game of chance.

Right now, users will be randomly matched to others who want to put the same amount of money on the barrelhead, but Levine says he eventually wants to make it possible to play against friends. "We've noticed people getting totally addicted, playing every night," Levine says. "The game creates the excitement of the do-or-die fantasy game every single night." (A screenshot from the StarStreet "Head-to-Head Daily Fantasy" game is below.)

Launching around the start of baseball season is another site, DraftKings, created by a trio of former VistaPrint executives. Jason Robins, Matthew Kalish, and Paul Liberman left the Lexington online printing company earlier this month — though they'd been developing the DraftKings concept for a year prior. "We got about as far as you can get without working on it full-time," Kalish says. They've already received a funding commitment from Ryan Moore at Atlas Venture in Cambridge, but Kalish tells me they're still talking to other venture firms and angels.

"VistaPrint is an Internet direct marketing company," Kalish says. "It's very good at low-cost customer acquisition and site analytics. So [investors] buy that we can apply those things to the fantasy sports daily model." He wouldn't comment on the amount the start-up is hoping to raise.

DraftKings will launch as a one-on-one competition, but Kalish says they also plan to support "five man leagues, where you can win a little bit more." Their aim is to launch the site within a month of baseball's opening day this spring.

"Estimates are that there are something like 30 million fantasy sports players, and only about 50,000 of them have tried daily so far," Kalish says. "That's a huge opportunity."

Right now, the company is operating out of CTO Paul Liberman's house, but DraftKings may soon share an office with LuckyLabs, another Atlas portfolio company.

Here's a screenshot of the StarStreet daily fantasy game, launching tomorrow:

starstreet-screen.jpg

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Scott Kirsner was part of the team that launched Boston.com in 1995, and has been writing a column for the Globe since 2000. His work has also appeared in Wired, Fast Company, The New York Times, BusinessWeek, Newsweek, and Variety. Scott is also the author of the books "Fans, Friends & Followers" and "Inventing the Movies," was the editor of "The Convergence Guide: Life Sciences in New England," and was a contributor to "The Good City: Writers Explore 21st Century Boston." Scott also helps organize several local events on entrepreneurship, including the Nantucket Conference and Future Forward. Here's some background on how Scott decides what to cover, and how to pitch him a story idea.

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