Though Google CEO Eric Schmidt and seemingly everyone else is telling publishers they should place some bets on potential new business models, The Philadelphia Inquirer's new venture may not be exactly what they had in mind.
Philly.com, the online unit of the Inquirer and sister newspaper the Philadelphia Daily News, has launched a legal online betting service called Instant Fantasy Games. The papers said last week that they are the first in their industry to make a foray into online betting, according to a report in Editor & Publisher, a newspaper trade journal.
"We're trying to serve two goals," said Yoni Greenbaum, vice president of product development at Philly.com. "Those are content differentiation and revenue. If you're looking at the sports sites out there, a lot of them have the same stuff...The challenge that this creates is we need to offer more. In this day and age, sports fans have insatiable appetites."
FanDuel, a British wagering company helped Philly.com launch Instant Fantasy. Part fantasy league and part sports book, the service enables bettors to pick groups of players from professional baseball, hockey, or basketball leagues. It operates much like the fantasy leagues from Yahoo.com, CBSSports.com (parent company of CNET), and ESPN--except those games are just for fun.
With Instant Fantasy, players pay $5 to $50 a game with the chance to win as much as $90, Greenbaum said. It's one-on-one, and players can compete with a friend or family member. If they don't have anyone they want to play against, the game's system will match them up with someone five minutes before competition begins. Games are held daily.
Internet gambling is illegal in the United States, but in 2006, the government made some exceptions involving fantasy sports leagues, E&P reported.
On Sunday night, Schmidt addressed a group of newspaper executives in Washington D.C. at the American Society of News Editors. "We have a business model problem," Schmidt told the crowd. "We don't have a news problem."
Schmidt said newspapers are "fundamental" to democracy and predicted they would find a new business model based on advertising and subscription revenue. Maybe he should have included creating a sports book.