FanDuel Tracks Digital Card Rips as Competitors Expand

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FanDuel is monitoring digital card rips rather than launching its own product, according to Sportico.com.
Fanatics, Underdog and PrizePicks already offer digital card rips, which let customers pay for randomly selected trading cards backed by physical collectibles.

FanDuel is monitoring digital card ripping rather than launching its own product, Sportico.com reported on Nov. 6, as competitors expand into the collectibles market.

The products combine randomly selected cards with instant resale offers, creating a gambling-like transaction within a collectibles business. Their growth presents another test of FanDuel’s cautious approach to products operating outside traditional state-regulated betting.

Dan Taylor, CEO of Flutter Entertainment, FanDuel’s parent company, described its approach as “tracking” rips, according to Sportico.com’s account of his comments to Barron’s. FanDuel is also sending frequent sportsbook bettors free credits for Arena Club, an unaffiliated card-ripping app, through its rewards program.

Competitors have taken different routes. Fanatics launched rips through its standalone collectibles business more than a year ago. Underdog and PrizePicks also offer the products nationwide, according to Sportico.com. DraftKings has no proprietary rips product, but its venture arm, Drive, has invested in Rips by Triumph.

How Digital Card Rips Work

Customers pay upfront for a digital trading card randomly selected from a curated collection. Each digital card corresponds to a physical card that can be delivered on request.

Users typically accept an instant offer to sell the card back and often spend the proceeds on additional packs. Some apps also let customers keep cards in a digital vault indefinitely.

Sportico.com cited Barron’s reporting that instant sell rates reach 98% on some apps. The average value of a pack is typically 5% to 15% below its entry price, according to Sportico.com.

Those mechanics help explain the comparisons to gambling: customers pay for an uncertain outcome, then can immediately sell and repeat the transaction.

Regulatory Caution Shapes FanDuel’s Approach

Sportico.com describes rips as currently treated like e-commerce in the US, without dedicated industry regulators or an official responsible gaming standard. It reported that no state had challenged whether rips constitute gambling.

That absence of challenges does not establish a settled legal classification. FanDuel has been more cautious than peers about regulatory gray areas, including potential backlash from states and tribal groups where online betting is not legal, according to Sportico.com.

The operator previously moved into another adjacent market through a prediction market joint venture with CME Group. Sportico.com reported that FanDuel has accounted for less than 1% of US prediction-market volume this NFL season.

Taylor has also told Flutter shareholders that the company must “move faster.”

If you or someone you know has a gambling problem, call 1-800-GAMBLER.

Source: As reported by Sportico.com.