FanDuel Complies with Complex, State-Specific Regulations for Rapid Expansion Using AWS

Based in New York, FanDuel offers online sports betting to more than 3.5 million average monthly customers and operates in more than 20 US states and Canada. In 2018, a US federal law that banned online sports betting outside of Nevada was repealed. Many US states and territories have since legalized online sports betting, and FanDuel was poised for rapid expansion across the newly legalized markets.

The Federal Wire Act required all financial transactions to be completed and processed within the same state. This meant that FanDuel had to run local infrastructure within each state where its customers placed bets. “That’s the core of what was driving our hybrid strategy and the need for us to build data centers,” says Shane Sweeney, senior vice president of technology at FanDuel. “For example, we can’t just deploy a single central instance in a region with databases in Virginia because a financial transaction from New Jersey hitting a Virginia data center would be prohibited by the Federal Wire Act.”

Building and running state-specific, on-premises data centers would have been prohibitively expensive and time-consuming, introducing friction into FanDuel’s expansion. The company needed a solution that could provide the necessary infrastructure quickly and efficiently while offering flexibility to adapt to each state’s regulatory environment. AWS hybrid cloud services presented an appealing alternative by offering a way to deploy state-specific infrastructure rapidly, without the need to build and manage physical data centers in each location. As a result, FanDuel could develop a flexible hybrid deployment strategy using multiple AWS services while maintaining strict compliance with complex, state-level regulations.

FanDuel’s deployment approach varies depending on the available infrastructure and regulatory requirements of each state. Using different AWS hybrid cloud solutions, the company can deploy the same infrastructure, services, APIs, and tools for its online sports betting platform where and when it is needed. For example, FanDuel deploys its applications within AWS Local Zones—which are used to run applications on AWS infrastructure closer to end users and workloads—in states where these zones are available. AWS Local Zones place compute, storage, and other AWS services close to large population centers, which empowers FanDuel to provide an exceptional experience to its customers.

“We wanted to have a seamless experience for our engineers and to focus on building products for our customers,” says Sweeney. “We let AWS do what it does well, which is manage and maintain all the AWS infrastructure. The more that we can rely on AWS, the better.”

For states without AWS Local Zones, FanDuel relies on AWS Wavelength, a service that embeds AWS compute and storage services within communications service providers’ data centers. In states where neither AWS Local Zones nor AWS Wavelength is available, the company uses AWS Outposts, a family of fully managed solutions delivering AWS infrastructure and services to virtually any on-premises or edge location for a truly consistent hybrid experience. Using this service, FanDuel can run select AWS services locally and connect to a broad range of services available in the parent AWS Region. The company uses AWS Outposts to create a consistent AWS environment within third-party data centers or colocation spaces. With these three services, FanDuel can maintain seamless integration with its broader AWS infrastructure while meeting state-specific data processing requirements.

FanDuel has reduced time to market and operational complexity using AWS by removing the need to operate physical data centers in each state. “When you’re managing 40 sites manually, deploying all that capacity is a challenge,” says Sweeney. “The scheduling, procuring, testing, and validating of that capacity is the value that AWS services brings because it means we’re prepared for anything we need.”

FanDuel can also seamlessly scale capacity 5–10 times as required for large sporting events, such as the NFL Super Bowl. FanDuel can rapidly provision additional capacity using AWS automatic scaling capabilities and compute resources, both in-region and across the hybrid and edge services that FanDuel uses. For customers, this means uninterrupted access and seamless application performance, even during peak betting times.

FanDuel’s hybrid cloud strategy came with the added benefit of providing enhanced disaster recovery capabilities. By employing multiple AWS services across different locations, the company has created a robust, distributed network infrastructure that is resilient in the event of an emergency. In a scenario where there is an outage in one location, traffic can be quickly rerouted to another AWS Local Zone or AWS Outpost. This helps FanDuel maintain high availability and business continuity, minimizing the risk of service interruptions that could impact the customer experience or even result in lost revenue during a betting event. FanDuel is exploring ways to further enhance disaster recovery by sharing capacity between multiple sites in every state where it operates. With that approach, the company can replicate data in near real time, which reduces the risk of service interruptions.

AWS hybrid cloud services empower FanDuel to adopt a truly consistent infrastructure for its online sports betting services whenever and wherever the company needs it. This infrastructure helps FanDuel maintain strict compliance with state-specific regulations and process all financial transactions within state lines as required by the Federal Wire Act. By using AWS Local Zones, AWS Wavelength, and AWS Outposts, FanDuel can rapidly deploy compliant infrastructure in each new market, streamlining the regulatory approval process. FanDuel now has the foundation to expand into new states efficiently and at scale.

“The combination of AWS hybrid cloud infrastructure, such as AWS Local Zones, AWS Wavelength, and AWS Outposts, was the evolution through which we unlocked the capabilities that AWS brings to data center and hardware management,” says Sweeney. “We can focus solely on building new products for our customers rather than worrying about infrastructure.”