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Top fantasy sports player uses software, analytics to reap millions
- jonathanberger 11y agoThe fact he's investing his time in building tools for others rather than putting all his time into winning on his own, raises doubts about his actual winnings. One explanation might be that he's maxed out how much he can win.
- ChuckMcM 11y agoAnother, perhaps more cynical explanation, is that he's actually being paid by one or more Fantasy Sports companies to help promote the notion that playing is a skill based activity rather than a gambling activity. Since the latter gets you banned in NYC :-)
- knowaveragejoe 11y agoBut both skill and luck are at play in DFS.
- nickodell 11y agoSure, but that's also true of, for example, poker. However, many states consider poker to be gambling.
- TheLogothete 11y agoGambling does not mean that poker is not a game of skill.
- dragonwriter 11y agoAs a key issue with DFS is state laws in which "gambling" is legally distinguished from "games of skill", yes, in context, it does.
- TheLogothete 11y agoI'm not from the US, so didn't know that, but it is stupid. Gambling and game of skill are not mutually exclusive. Gambling means that there is some variance, some risk involved. You gamble on the outcome. That doesn't mean you cannot develop a skillset which will make taking the risk profitable, over the long term. Any law that says otherwise is ill-written.
- akerl_ 11y agoBy that definition, every action you undertake is gambling. Driving to the grocery store is gambling. But since regulating driving your car to the shop under "gambling" laws doesn't make sense, "gambling" as a legal concept involves wagering money on games of chance, and "games of chance" is a distinct concept which is separated from "games of skill". This is the line that DFS is trying to walk, because the skill side of the line is the side that lets them operate in places where gambling is more strictly regulated.
- TheLogothete 11y agoLike I said, any law that insists on making a mutual distinction between games of skill and gambling (risking money on a probability of an outcome) is ill-written. Poker is a game of skill just like backgammon. You can wager money and there is risk (chance) involved, but you can develop skills which will ensure that you are a winner over a less skilled opponent. Just like golf. There is always the chance that you will not make the necessary strikes and a less skilled opponent takes a game from you, but over the long run, you can sufficiently influence the outcome and achieve a positive win rate. This is what makes it a skill-based game. You influence it by your skills. You can place wagers and gamble on the outcome, but that doesn't suddenly make it any less not a game of skill. I'm not very familiar with fantasy sports, but to the best of my knowledge, the same holds true there too. A game of chance cannot be distinguished from games of skill. All games involve chance. This problem probably arises from the poor understanding of "chance" and probabilities by the people who wrote the law (presuming Hanlon's razor here). They wanted to ban games where the operator bleeds the players dry, like slots, lottery, etc., and called them "game of chance", but there is more to the story of "chance", like i outlined above.
- grobbles 11y agoBut this is also true for playing the stock market. Indeed, the stock market and fantasy sites are extremely similar, with the same fundamental issue -- a small number of people with a technical and information advantage are essentially skimming the table clean of the entry fees of a lot of people picking randomly or emotionally.
- nradov 11y agoIt's not really like the stock market since with stocks the majority of players "win" when measured over a sufficiently long time scale. A better analogy would be playing the derivatives market, which is zero sum (minus broker fees).
- grobbles 11y agoThe stock market has a winning history because it is, to some degree, a pyramid scheme -- a growing population == more entrants paying out those who entered earlier. When the population stops growing, that premise no longer holds. See: Japan.
- venomsnake 11y agoThat is true also for MTG and any game in which you have randomness that does not originate from any of the players. But the question is ratio between luck/skill
- simula67 11y agoJohn Oliver did a segment on this : https://www.youtube.com/watch?v=Mq785nJ0FXQ https://www.youtube.com/watch?v=Mq785nJ0FXQ
- hkmurakami 11y agoSounds like online poker all over again ;)
- jgalt212 11y agoor maybe even more cynically, he'll use data about how his customers use his tools to further optimize his own betting strategies.
- avn2109 11y agoSounds like this is the likely most profitable angle, similar to how DK employees use proprietary DK data to win at FD (and vice versa). Your comment should be higher up the page.
- knughit 11y agoThere was a recent news story about how some fantasy company employee made a fortune using questionable means (possibly abusing such data)
- dswalter 11y agoIn addition, with the attention fantasy sports has been getting, his competition is probably stepping it up a bit. It may be easier to beat everyone's uncles than to best teams of people who are also using statistics/machine learning/sports analytics.
- mr_turtle 11y agoI have to disagree. I am not too familiar with the world of DFS, but I am with online poker. I understand many heavy hitters from poker transitioned into DFS a few years ago. There clearly is a need for better information, tools, and software for DFS players to make their decisions. Whether this will hurt his winnings by making his competition smarter is another issue. Can't find fault in him by branching out to another stream of revenue.
- IanDrake 11y agoCreate a competitive advantage and use it while you can. Then when it's no longer an advantage sell it to the masses and show them the pile of cash you made with it. Happens all the time, works all the time.
- asuffield 11y agoAccording to the article, he's coming under legal pressure from various sides who want to stop people from doing this sort of thing. That sounds like an excellent time to shift gears to me.
- mikeryan 11y agoIt does seem like one of those real-estate folks selling their "three step system for creating wealth flipping homes" who probably make more selling the system then actually flipping houses. In this case where he'd be giving folks the software they need to beat him and if these software systems do work they'd eventually just flood the market and make the whole point moot. That being said the whole industry is under siege. He may just be trying to make as much as he can before it officially becomes gambling or automated play becomes illegal.
- puranjay 11y agoIt's called income diversification. Why make 5 million from one source when you can make 10 million from three sources?
- downandout 11y agoAnother explanation might be that he wants to get everyone else playing the set of lineups his algorithm is spitting out. In GPP (guaranteed prize pool) tournaments, there are usually very large fields and the prize structures are heavily weighted toward a tiny pool of top finishers. The key to winning these tournaments isn't necessarily picking the lineup with the most expected fantasy points, but rather having lineups that very few others have, because you are looking for an extreme result that is different from that of your competition. GPPs are won much more through application of game theory than they are through any analysis of the specific games or players. If he gets a large percentage of the DFS player pool to play his algorithm's lineups and he goes a different direction, he'll crush the GPPs.
- giarc 11y agoI'm not a game theorists or anything but you don't win by having a different team, you win by having a different team that also does well. If his software is telling people to pick XYZ great lineup, he has to come up with a better lineup otherwise they all share the prize and he gets nothing.
- downandout 11y agoIt matters to some degree which players he picks, but in the case of GPPs it matters much more that the lineup is unique. There are lots of lineups that have nearly the same expectation.
- fredophile 11y agoHe doesn't need to come up with a better lineup. An inferior lineup with a higher payout could lead to a fighter expected value. For example, if he has a lineup that wins 1/5 the times the best lineup does but pays out 10 times as much he would double his returns.
- gozur88 11y agoReminds me of the guys who sell books on wining at blackjack. If your system is so good, why are you selling books?
- tempestn 11y agoBecause even if you have an edge at a game of skill and chance, it's not a license to print money. Professional blackjack players have to fly under the radar, and even with the large bankroll needed to survive swings, can only expect to make somewhere in the 5 figures. Plus, you have to spend all your time playing blackjack. Wouldn't you rather sell a book?
- babuskov 11y agoBecause it's passive income.
- FanaHOVA 11y agoYou play against the house in blackjack, you're not playing against other people who read your book so it doesn't hurt his chances at winning.
- RogerL 11y agoPlaying blackjack is really, really, really boring (really!). There's a reason professional gamblers call it a 'grind'. There are mathematical systems to beat blackjack (counting cards, change your bets when the odds are in/out of your favor). Are you doubting this? The number of people that are going to successfully read the book, count cards, and beat the author are few to zero. The number that will buy the book? Many. Heck, I've read poker books, but don't play poker. It's interesting to learn algorithms, reasoning, and also to consider the psychological elements. As an aside, blackjack is beatable if you count cards. The books are not bogus (not sure if you are implying that or not).
- schwap 11y agoDaily Fantasy Sports is not like blackjack, because how well your fellow players do directly impacts your chances of winning.
- paxtonab 11y agoHe's also involved in multiple lawsuits stemming from the fact that he has an "unfair advantage" from using his software. If he makes it available to everyone he will still be making money if the courts don't rule in his favor... Plus fantasy sports are huge right now. I'd say with his track record he has the potential to make a very profitable startup. He also had to pony up $24k to submit 888 lineups on the day he won $221k, so I'd say he's doing all right.
- ianstallings 11y agoHe probably does it for the same reason we program and tell the world about it on HackerNews - accolades. People are partly driven by peer approval. Another thing is that this type of job, relying on gambling for a living, can be prone to huge swings in wins and losses. So people look for ways to soften the blows with stable income.
- emidln 11y agoThere is significantly less risk in selling the information than using the information.
- akoumjian 11y agoWouldn't commercializing these tools reduce his own potential earnings?
- drewmate 11y agoNot sure what kind of a privacy policy his software will have, but I imagine the aggregate data of thousands of people using his software (if he has access to it) might be even better than just using it by himself.
- has2k1 11y agoAs the top ranked player, selling his "methods" could be more lucrative than his competition earnings. If the he considers the barrier to be sufficiently low, then he would expect his earnings to drop with time. There are ways of looking at it that make his decision rational.
- jsprogrammer 11y agoWouldn't sales drop with time as the market is saturated with identical players?
- has2k1 11y agoIf you have high earnings in a market that you think has a low barrier of entry, you can expect worthy competitors to show up. If you are the worthy competitor (No. 2) but maybe just cannot dethrone the number one, then you could decide to sell methods that make you a worthy competitor. When more worthy competitors join because the No. 2 guy decided sell his secrets, top guy makes even less as the each participant's winnings are drawn from the pool. In this case profit margin is proportional to the difference in skill. If you are the top guy, you could look on as the No. 2 guy establishes a solutions market (as your profits drop) or you could start the solutions market. It seems like if you are the top guy, the main consideration is How special/unique is my secret sauce? The answer to that and guides the second, When is the right time to become a solutions provider? There will be market saturation with either your product or that of another entity. With time the game approaches to pure gambling and the money paid for the solutions becomes a Vig of sorts! Along the way sales would drop according.
- jah 11y agoI built a system that scraped projections off http://apps.fantasyfootballanalytics.net/projections http://apps.fantasyfootballanalytics.net/projections and joined them with weekly salary information from DraftKings. I then ran that data through a genetic algorithm that maximized projected fantasy points while keeping the team salary under the limit. I entered about 10 matches ... and I lost every single match. I don't know if my projection data was bad, my sample size too small, or if I was just unlucky. I gave up after a few weeks.
- harryh 11y agoMaximizing projected points isn't the right goal if you are trying to win against a large pool of players. Instead you want to maximize your variance.
- micwawa 11y agoI'd like to see someone describe how to do this in practice. Maximizing variance doesn't do you much if your high end doesn't beat the others, especially if you don't know how high you have shoot. If you overlap two candidate probability distributions and know what you have to beat in order to win, you can make a choice. In my dabblings in FanDuel, I've tried to maximize the expected value, and found that this produced surprisingly wild results - I've jumped from the 99 percentile one week to the .1 percentile the next.
- perryh2 11y agoYour sample size is too small and I don't think you put in enough effort into your algorithm. Projections can be used as the base of your own calculations but you need to do more. Look at other things like matchups and player matchups, and look out for value picks. Based on my own experience, I've seen some absolute monsters enter with $10K and come home with $200K+ in a single weekend. These players create hundreds of different lineups each week and enter them in the big contests.
- quaffapint 11y agoI scraped from about 6 different sites - went through millions of combinations and only did so-so. I think it's simple - the people that win play A LOT of rosters to cover their bases. That seems to be what the person in the story is doing and what I've read other big players are doing.
- swanson 11y agoIt's a selling shovels during the gold rush move. There are tons of people popping up that sell lineups on Twitter (similar to stock picking 'schemes', split your audience and keep selling to the ones that you gave good picks). There are paid analytics tools like the one in the article (and others endorsed nearly every other top 10 player). You can buy projections built on someone's machine learning model, or the aggregate of 50 top fantasy analysts. For a few bucks, you can get an Excel addon to optimize your lineups and script enter them for you. There are "group pools" that stake players to enter high-limit contests. Take every business idea or angle from stock trading and online poker and they either exist already or will be released before next NFL season for DFS.
- asdfzxc 11y agoFunny I came across this line recently, in an article about trading terminals like the ones manufactured by Bloomberg etc. Maybe this guy's company is offering something to that effect - A glorified Data visualization software? (edit: Bloomberg's offering probably has much more value) It's a pretty smart move.
- geococcyxc 11y agoIf you've never heard of "fantasy sports", John Oliver to the rescue: https://www.youtube.com/watch?v=Mq785nJ0FXQ https://www.youtube.com/watch?v=Mq785nJ0FXQ
- daurnimator 11y ago(video not available outside of america)
- vmlinuz 11y ago(video plays fine here in Hong Kong)
- babuskov 11y ago(plays fine in Serbia)
- aembleton 11y agoIt plays fine in the Netherlands. I'm in the UK but use Browsec plugin [1] to watch it through a VPN in the Netherlands. 1. https://addons.mozilla.org/en-GB/firefox/addon/browsec/ https://addons.mozilla.org/en-GB/firefox/addon/browsec/
- plinkplonk 11y agoplays in India
- agiamas 11y agoplays in EU
- djsumdog 11y agoI was thinking about this. You beat me to it. Great video basically showing those are gambling sites and the only people who make it big are mathematicians with tons of spreadsheet and custom R scripts.
- mr_turtle 11y agoI think this is less an argument for how much skill is involved in DFS - there is, but how slim the chances are for recreation players to win against the pros. This seems like a scam for recs who stand no chance.
- TheLogothete 11y agoHow slim are the chances to win a chess match against Magnus Carlsen?
- jegutman 11y agoProbably the better comparison would be how likely an amateur is to win against the world backgammon champion. Backgammon has some luck in it with dice rolls, but if the skill difference is big enough luck has a much tougher time making any difference.
- kriro 11y agoThe juice in DFS is ridiculous but the player pool is full of really bad players. As soon as the player pool gets a bit better the edges get too small in my opinion. I have no access to DFS as I'm in Europe once I do I'll probably adapt my dynasty FF points predictor to it for fun :) Good time to switch to selling the software if you anticipate the edges to get smaller. Quite similar to the poker world where people that used to win big sell coaching at high rates and quite often people figure out that those coaches don't beat the games anymore etc.
- phillc73 11y agoI'm in Europe and have played DFS with Mondogoal.