4 ms·

In case anyone is puzzled about what FanDuel and Draft Kings do, Recode is definitely being very pedantic with its description "daily fantasy sports." These ar

In case anyone is puzzled about what FanDuel and Draft Kings do, Recode is definitely being very pedantic with its description "daily fantasy sports." These are a form of real-money-payout online gambling. They're legal. How quickly they evolve into pure casinos, as opposed to just 95% casinos, I don't know. They can't do something as clinically addictive as virtual slot machines and give payouts, but I bet they can come pretty close.

NhanH 11y ago
Since I don't know much about the topic, how much gambling is involved in fantasy sports? In other words, how much skill would be involved in all the drafting and picking etc, as opposed to just pure luck?
- ericdykstra 11y ago
  There's a lot of skill involved, but Fanduel (and DraftKings, the other major DFS site) take ~10% of every entry fee, which makes it very hard to be a consistent winning player. It's not that hard to be break-even given you know the players across the league well and have a real understanding of the underlying mechanics of the sport. As far as the business goes... At some point they'll run out of new players, and the sharks will have a big enough bankroll to basically suck all the dead money out of the game leaving almost nothing for good, but not fantastic players. When that happens, either people will keep playing because it's fun and Fanduel has a great business on their hands (precedent: sports betting) or people who are not making money will get out, and new players will be discouraged from joining an established scene (precedent: online poker). I'm leaning more towards it going to the fate of online poker eventually, but it might not happen until sports betting is legalized in the US.
  - waterlesscloud 11y ago
    I don't think the 10% fee will be sustainable in the long run. Price competition will be inevitable once the manic growth phase is over.
    - ericdykstra 11y ago
      The players who care more about the fees are the better players who see it as cutting directly into their ROI. If only top players move to low-fee sites, that doesn't help their ROI much, does it? Casual sports betters prefer sites with convoluted bonus and rakeback programs to sites with low fees. I think casual DFS players will stick to the names that are on the commercials and the sites with the prettiest and most trustworthy-looking UI. I believe something similar happened in poker, where players would go to the sites where the worst players were, and not where, player-strength being equal, they would make the most money.
    - acconrad 11y ago
      Except there are a ton of competitors and it's already become an oligopoly. FanDuel and DraftKings alone have accounted for 95% of the DFS revenue as of 2015, and just acquired the two other biggest competitors in the space (DraftStreet and StarStreet). Big prize pools drive harder than lower fees.
- prawn 11y ago
  Fair bit of skill. A knowledgeable fantasy player is going to trump someone guessing or even someone with a passing interest unless there are major and unexpected injuries. I've previously played NBA fantasy, NBL (Australian league) fantasy and also bet small-stakes on basketball (mostly NBL). I no longer have time for fantasy but still bet. When playing fantasy NBA against friends, I used various methods of calculating average output and forecasting it against a schedule and then made decisions on when to trade players. That was in a league where player values rose and fell based on their popularity in the system. It can get very time consuming if you want to maximise your chances. The NBL was simpler but someone using a spreadsheet to time trades through the season would always beat those who weren't. I bet on the NBL because it's not a strong and well-researched market by bookmakers in Australia and I have very good domain knowledge short of advanced statistics (hear a lot of rumours, know players, tendencies, injuries). I have been approached in the past by a bookmaker about trading my info with them for a weekly tab. I imagine these daily fantasy comps remove the schedule from the equation (besides fatigue, etc), but you'll generally be up against other committed players. Never played one personally. I imagine you'd have to rely on fleecing fresh/occasional players rather than the established pros.
- waylandsmithers 11y ago
  It is a skill game similar to poker in many respects (and it seems that the operators of these daily fantasy sites have modeled a lot of their games after online poker tournaments). It is a negative sum game due to the fees that the operators take out of the pools, and luck dominates the short run, but skillful players with better estimating skills or access to privileged information can win consistently in the long run.
Aeolun 11y ago
Thanks for the explanation. Am I the only one that thinks that term has absolutely nothing to do with fantasy sports?
- onewaystreet 11y ago
  "Daily fantasy sports" is exactly what these sites are. You pick players daily/weekly rather than for an entire season. There's nothing pedantic about that description.
deleted 11y ago
[deleted]
err4nt 11y ago
Hi! I helped build a competitor to FanDuel in the daily fantasy league niche as well. While our app did also allow real-money wagering with payouts, the focus of play was to be social and game with your friends rather than to make money or gamble with strangers. It is totally normal for people to play and nkt wager any money - maybe for you and your friends bragging rights are enough, or maybe you assign your own real-world prize to the winner if you want. but if you wanted to 'sweeten the pot' with dollars, we also made that possible through the website. It was definitely 95%-100% game, and optionally 5% real money wagering if you even did that. For example, I have 'won' $25 I probably can't legally withdraw from the company by playing, but Ive never wagered a penny and dont even have a card hooked up! So it is possible to play with real money without paying if you win enough too! Though you could hook up a card and wager tons of money, theres no additional reward to that, and it wont give you any advantage in how you perform in the game. Its not designed to entice people into gambling.
- acconrad 11y ago
  I also helped a competitor that got acquired by DraftKings. Anyone worth their salt in this industry knows this is about the money. The top guys throw down $25,000 A DAY. Many of them are severely in the red, in spite of winning large tournaments. If you're not building an app around big prize pools, you simply will not be on anyone's radar.

NhanH 11y ago

Since I don't know much about the topic, how much gambling is involved in fantasy sports? In other words, how much skill would be involved in all the drafting and picking etc, as opposed to just pure luck?

ericdykstra 11y ago
There's a lot of skill involved, but Fanduel (and DraftKings, the other major DFS site) take ~10% of every entry fee, which makes it very hard to be a consistent winning player. It's not that hard to be break-even given you know the players across the league well and have a real understanding of the underlying mechanics of the sport. As far as the business goes... At some point they'll run out of new players, and the sharks will have a big enough bankroll to basically suck all the dead money out of the game leaving almost nothing for good, but not fantastic players. When that happens, either people will keep playing because it's fun and Fanduel has a great business on their hands (precedent: sports betting) or people who are not making money will get out, and new players will be discouraged from joining an established scene (precedent: online poker). I'm leaning more towards it going to the fate of online poker eventually, but it might not happen until sports betting is legalized in the US.
- waterlesscloud 11y ago
  I don't think the 10% fee will be sustainable in the long run. Price competition will be inevitable once the manic growth phase is over.
  - ericdykstra 11y ago
    The players who care more about the fees are the better players who see it as cutting directly into their ROI. If only top players move to low-fee sites, that doesn't help their ROI much, does it? Casual sports betters prefer sites with convoluted bonus and rakeback programs to sites with low fees. I think casual DFS players will stick to the names that are on the commercials and the sites with the prettiest and most trustworthy-looking UI. I believe something similar happened in poker, where players would go to the sites where the worst players were, and not where, player-strength being equal, they would make the most money.
  - acconrad 11y ago
    Except there are a ton of competitors and it's already become an oligopoly. FanDuel and DraftKings alone have accounted for 95% of the DFS revenue as of 2015, and just acquired the two other biggest competitors in the space (DraftStreet and StarStreet). Big prize pools drive harder than lower fees.
prawn 11y ago
Fair bit of skill. A knowledgeable fantasy player is going to trump someone guessing or even someone with a passing interest unless there are major and unexpected injuries. I've previously played NBA fantasy, NBL (Australian league) fantasy and also bet small-stakes on basketball (mostly NBL). I no longer have time for fantasy but still bet. When playing fantasy NBA against friends, I used various methods of calculating average output and forecasting it against a schedule and then made decisions on when to trade players. That was in a league where player values rose and fell based on their popularity in the system. It can get very time consuming if you want to maximise your chances. The NBL was simpler but someone using a spreadsheet to time trades through the season would always beat those who weren't. I bet on the NBL because it's not a strong and well-researched market by bookmakers in Australia and I have very good domain knowledge short of advanced statistics (hear a lot of rumours, know players, tendencies, injuries). I have been approached in the past by a bookmaker about trading my info with them for a weekly tab. I imagine these daily fantasy comps remove the schedule from the equation (besides fatigue, etc), but you'll generally be up against other committed players. Never played one personally. I imagine you'd have to rely on fleecing fresh/occasional players rather than the established pros.
waylandsmithers 11y ago
It is a skill game similar to poker in many respects (and it seems that the operators of these daily fantasy sites have modeled a lot of their games after online poker tournaments). It is a negative sum game due to the fees that the operators take out of the pools, and luck dominates the short run, but skillful players with better estimating skills or access to privileged information can win consistently in the long run.

Aeolun 11y ago

Thanks for the explanation. Am I the only one that thinks that term has absolutely nothing to do with fantasy sports?

onewaystreet 11y ago
"Daily fantasy sports" is exactly what these sites are. You pick players daily/weekly rather than for an entire season. There's nothing pedantic about that description.

deleted 11y ago

[deleted]

err4nt 11y ago

Hi! I helped build a competitor to FanDuel in the daily fantasy league niche as well. While our app did also allow real-money wagering with payouts, the focus of play was to be social and game with your friends rather than to make money or gamble with strangers. It is totally normal for people to play and nkt wager any money - maybe for you and your friends bragging rights are enough, or maybe you assign your own real-world prize to the winner if you want. but if you wanted to 'sweeten the pot' with dollars, we also made that possible through the website. It was definitely 95%-100% game, and optionally 5% real money wagering if you even did that. For example, I have 'won' $25 I probably can't legally withdraw from the company by playing, but Ive never wagered a penny and dont even have a card hooked up! So it is possible to play with real money without paying if you win enough too! Though you could hook up a card and wager tons of money, theres no additional reward to that, and it wont give you any advantage in how you perform in the game. Its not designed to entice people into gambling.

acconrad 11y ago
I also helped a competitor that got acquired by DraftKings. Anyone worth their salt in this industry knows this is about the money. The top guys throw down $25,000 A DAY. Many of them are severely in the red, in spite of winning large tournaments. If you're not building an app around big prize pools, you simply will not be on anyone's radar.