Fantasy Sports Startup Looks To Double Footprint With New Atlanta HQ
A daily fantasy sports startup is betting that a big, new Atlanta headquarters will fuel its next stage of growth.
Atlanta-based PrizePicks is in the market for a new headquarters that would span between 40K and 60K SF, said Michael Tucker, the CEO of local brokerage firm Scotland Wright Associates, who is representing the company in its office search.
“That’s the goal of ATV, to graduate companies and to become bigger. We came to the point where we achieved that objective,” Steven Kerstein, the company’s head of relations and market intelligence, told Bisnow. “We realized that we were in a position to need more space.”
The company has seen rapid headcount growth after launching in 2014 with just a handful of full-time and part-time employees working out of the Atlanta Tech Village. It has more than 250 employees today, 65% of whom work in Atlanta, Kerstein said.
PrizePicks is the second major daily fantasy sports platform to expand in Atlanta. In 2021, FanDuel announced plans for a $15M, 68K SF technology hub at Ponce City Market in Midtown. FanDuel, a division of British Flutter Entertainment, said it planned to employ more than 900 workers over the next five years. It has since offered 15K SF of its space on the sublease market, which was being eyed by Mastercard, the Atlanta Business Chronicle reported in May.
In 2021, PrizePicks CEO Adam Wexler announced that the company was planning to add 1,000 new jobs in Georgia over the next five years after seeing annual recurring revenues top $20M at the time. This year, the company announced fantasy sports partnerships with the Atlanta Braves, Atlanta United and NASCAR for its 75th season.
“We’re an Atlanta-rooted company,” Kerstein said. "We want to make sure that we’re growing our talent pool from our roots."
PrizePicks is riding the wave of overall fantasy sports betting and gaming industry growth across the globe. Between 2021 and 2022, the number of U.S. adults involved in fantasy sports grew 13.5% to more than 50 million players, and a total of 69.5 million U.S. adults either bet on sports or play in a fantasy game, according to a study by consulting firm Leger for the Fantasy Sports & Gaming Association. FSGA also estimates there could be 19 million potential new fantasy bettors over the next year.
PrizePicks users wager on individual professional athletes' performance on a given day, an alternative to traditional sports gambling, which is still illegal in many states, including Georgia. Since daily fantasy sports is considered a game of skill, PrizePicks is allowed to be played in most U.S. states, including Georgia, Kerstein said.
Laura Bianchi, a partner and co-founder of the law firm Bianchi & Brandt, said companies like PrizePicks are benefiting from the momentum of interest in online sports betting while operating legally within a loophole that allows real-money wagers on fantasy sports platforms.
Since 2017, and especially after the landmark 2018 Supreme Court decision to allow individual states to determine the legality of sports betting, 37 states and the District of Columbia have allowed fantasy sports betting under the auspice of it being a skill-based game, Bianchi said.
“Really the question was always is it a game of skill or a game of chance? And most states determined that it’s a game of skill,” she said. “If you’re doing these fantasy sites, then it’s not gambling."
PrizePicks' office search gives it leverage as landlords look to capture a dwindling pool of prospects to fill their buildings while also reconciling that many existing tenants are likely to shrink their offices in a hybrid-work world, Greenwood Commercial Real Estate Group principal James Pitts said.
"There will be a lot of interest" from landlords, Pitts said of PrizePicks' search.
Landlords are offering generous free rent and tenant allowance packages to sweeten their deals, while trying to keep face rents steady, which helps them when it comes time to sell or refinance their buildings, Pitts said.
“I think everybody is concerned about the big leases coming up throughout the country,” he said. “Landlords are trying to keep their face rents up."
Tucker declined to say which buildings PrizePicks is considering and didn't give an estimate on when a lease decision would be made. He added that the company is looking for a direct lease, rather than taking some of the record amount of sublease space on the market.
While PrizePicks has not declared an official back-to-the-office policy, Kerstein said the company believes collaboration is critical for its business. The headquarters space needs to entice employees to come into the office more often, he said.
“We value that type of connection that people get” in an office, Kerstein said. “I think we just want to build a culture where people can do their best work. We like to make sure that people get to meet each other, especially in different departments. A lot of our secret sauce comes from having a lot of collaboration.”