The business of online, one-day fantasy sports betting has become huge almost overnight.

Here’s one way to measure that explosive growth: DraftKings, a Boston-based company founded in 2012, is reportedly attracting investment from one of the biggest names in sports media.

According to a Wall Street Journal report today, Disney — the parent company of ESPN — is planning to invest about $250 million in DraftKings. The WSJ also says the deal comes with an agreement for DraftKings to spend about $500 million in advertising through ESPN in the next few years.

That kind of spending is possible for a small, young company for two reasons. First of all, people are spending a ton of money on this particular flavor of fantasy sports: DraftKings recently said that players spent about $300 million on the fees required to play online, quick-turnaround games with the company last year.

DraftKings also said its own revenue amounted to about $30 million, since a huge portion of entry fees is recycled into prize payouts. The company says on its homepage that it will pay out a total of $1 billion in prize money this year.
The other reason DraftKings might need to plunk down hundreds of millions in advertising? It’s in a fiercely competitive race with New York-based FanDuel, a larger competitor. FanDuel claims on its website that it holds 80 percent of the market in one-day fantasy sports, and reports revenues and player fees thatin the fourth quarter of 2014 alone topped DraftKings’ yearly totals.

DraftKings has previously raised about $75 million in private investment from backers including Redpoint Ventures, GGV Capital, and Cambridge-based Atlas Venture. FanDuel has its own big-time institutional investors, including NBC, the NBA, and Comcast.

DraftKings declined to comment on the WSJ report. Fortune previously reported that DraftKings and Disney were in investment talks.

It’s the second piece of significant news this week for DraftKings. On Thursday, Major League Baseball extended its exclusive deal that makes DraftKings the league’s official daily fantasy game.

Fantasy sports have been around for ages, but are traditionally played in season-long leagues that allow players to act like the virtual general manager of a team, drafting, signing, and trading for players to field the group they think will perform the best on game day. Points are awarded for statistical achievements on the real field of play.

Daily fantasy sports turns that up several notches by letting people assemble short-term teams, harnessing the huge networking power of the Internet to match them with other players in quickly disappearing fantasy “leagues.” Players on DraftKings and FanDuel plunk down real money to play, and can win real money in return.

If that sounds like gambling, you’re not mistaken. But, while almost all online gambling is illegal under federal law, lawmakers carved out a space for fantasy sports.

The technical reason is that, because players are picking their fantasy rosters and competing against other people, it’s considered more of a game of skill, rather than a game of chance in which someone is betting against a bookmaker on the outcome of a game. The Washington Post has a good explanation of how it all works, including a significant tidbit about Major League Baseball actually having an investment stake in DraftKings.