2 ms·

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 consisten

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.

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.