At AlphaDraft, pro video game players become stars of fantasy sports

AlphaDraft chief Todd Peterson wants to help more people make a living as professional video game players

Todd Peterson knows games.

He twice quit jobs selling software to play “Call of Duty” and other video games for fun until he needed a paycheck again. He spent so much time with a controller in hand he’d rather not say exactly how much, afraid his mom might get angry. Over the last couple of years, he’s won about $3,500 playing fantasy football.

Now, with a fresh $5 million infusion from investors, Peterson is out to bring fantasy contests to the emerging arena of professional video gaming. Video game tournaments are nothing new. But streaming video networks such as Twitch and Major League Gaming have made matches between skilled players more accessible to more viewers, drawing in advertisers and speeding the growth of competitive leagues reminiscent of traditional sports.

Peterson, 40, barely has time to play video games anymore, but he hopes that his Venice start-up AlphaDraft makes it easier for people to do something he struggled to do on his own: earn a living as an “eSports” player.

Peterson sees gold in fantasy rosters based on real video-game tournaments. The tournaments are popular: The “League of Legends” championship in December boasted 11.2 million simultaneous online viewers, or about as many people as watched the Billboard Music Awards on ABC Sunday night. Top players earn in the six figures.

AlphaDraft is testing different types of daily and weekly contests, including some that are free to enter. Users draft a team of players from a pool of several real teams. Players’ actions in the game translate to fantasy points.

In one possible variation, a user could wager $5 and win $1,000 from the prize pool if their team generates more points than the teams of hundreds of competitors. Fantasy sports are not considered illegal gambling under U.S. law. Peterson declined to discuss the source of statistics that determine points, calling the culling of that data part of the company’s secret formula. Players only know that stats such as kills and assists count for points.

Launched in January, AlphaDraft has drawn 1 million entries and plans to dole out $5 million in prizes by next January. It makes money by taking a portion of the entry fee. Fantasy contests for five different video games should be supported by the end of the month, Peterson said.

He’s on the hunt for people as obsessive about fantasy and gaming as he is. He hired Chris Mike Thomas, who quickly won $30,488 on AlphaDraft by analyzing player data, to become a writer and analyst. He hired someone else off a League of Legends forum on Reddit.

Investors in AlphaDraft include former NBA Commissioner David Stern and basketball star Carmelo Anthony’s venture capital fund Melo7 Tech Partners. Talent agency William Morris Endeavor is another investor; its rival, Creative Artists Agency, backed AlphaDraft’s chief competitor Vulcun last month. Metamorphic Ventures, Upfront Ventures, Greycroft Partners also put money into AlphaDraft.

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