Interesting Daily Fantasy Sports Story

[ALL-IN JD]

http://finance.yahoo.com/news/fantasy-s ... 41954.html

[Edwards Kings]

Sounds like just your type of investment, Jeff!

[Hells Satans]

Good for him. He's exactly the reason why I've basically stopped playing the dailies. I can't compete with that in the long-term and he's one of many of those types of guys now in the game.

[Greg Ambrosius]

What a very interesting read. It does seem like the daily games are seeing more and more of these mega-team owners who can outstack the casual player. It will be interesting to see if the daily games can avoid the churn rate of casual players. But maybe it doesn't matter when more and more owners are taking so many teams.

It's definitely a good read and an interesting angle on the Daily Fantasy Sports market.

[Outlaw]

Those numbers are not real. They applied $100.00 even to each of the 33 million supposed players. Their are not 33 million fantasy players... that is roughly 12% of the total US population, 24% of the entire male population and roughly 50% of the 18-65 male age group. There is no way roughly half the males in this country over 18 are playing fantasy.... let alone paying to do so.. I know a lot of people, both family and friends and all but a few have ever played fantasy and few of them are active... not counting people I've met in fantasy leagues.

I know a few woman play also, but not enough to move any analysis much...

My best guest estimate on active Fantasy players who actually spend more than 100.00 a year on Fantasy would be well South of 1 million total people.

Daily Fantasy is nothing but one Big pyramid scheme... it relies on new players to come in and lose and is nothing more than constant regurgitation of winnings... but that's for another discussion.

anyone else got a best guess...

[Greg Ambrosius]

Those numbers are not real. They applied $100.00 even to each of the 33 million supposed players. Their are not 33 million fantasy players... that is roughly 12% of the total US population, 24% of the entire male population and roughly 50% of the 18-65 male age group. There is no way roughly half the males in this country over 18 are playing fantasy.... let alone paying to do so.. I know a lot of people, both family and friends and all but a few have ever played fantasy and few of them are active... not counting people I've met in fantasy leagues.

I know a few woman play also, but not enough to move any analysis much...

My best guest estimate on active Fantasy players who actually spend more than 100.00 a year on Fantasy would be well South of 1 million total people.

Daily Fantasy is nothing but one Big pyramid scheme... it relies on new players to come in and lose and is nothing more than constant regurgitation of winnings... but that's for another discussion.

anyone else got a best guess...

I don't think your guesstimates are even close Mike. I have the latest FSTA survey done by Ipsos in front of me that we'll unveil next week in San Francisco and yes those numbers are rising again. There were more than 1 million people playing fantasy sports back in the early 1990s and now that number has grown to more than 35 million. I have no idea why you'd think that less than 1 million people are playing today Mike. That's crazy.

Darren Rovell just tweeted out Fanduel's numbers from 2012. All you have to do is look at those to see how big this market is becoming. Look at their annual prize payouts for 2013 and what they are expected to do in 2014 and tell me if you think there are less than 1 million people playing fantasy sports. The numbers are crazy.

We have done this Ipsos survey every year since 2004 and it's gone from 7% of adult Americans playing fantasy sports to 14%. With the growth in our population, this is a strong number. And the number of leagues that each player is now playing in has grown consistently, so obviously the revenue figures just keep going up and up. It's not as high as this article states, but it's definitely in the hundreds of millions of dollars per year.

[Outlaw]

Greg- there is a difference of paying to play/win and free. My guesstimates were based on those spending $100.00 or more a year as the article made the assumption on. Your assumption of hundreds of millions per year is a long ways from 3.3 Billion the article states. I've seen the FSTA/IPSOS data over the years, its one survey and a self serving one at that. I'm not trying to diminish it, but its quite easy to poke holes in it. in 2012 FSTA was claiming the same 3.3 billion in revenues. The Majority of fantasy players, jump in, lose and leave or then just play for the fun of it. My opinion of the data is that it is all over the Map and one knows whats really real, but in fairness that's all there is now really regarding Fantasy. Let WCOF and all the other ones that failed serve as a reminder, when the next big prizes don't get paid by some Fantasy business. The Dailys are relying on investors to fund them right now, those investors throw 20 million around like its chump change.

You know your NFBC numbers better than anyone. NFBC and NFFC is the biggest and most successful large dollar Fantasy business out there and look at your own amount of players, its minuscule. Look at how many others, like WCOF or whatever the name was, have tried, not paid and went out of business the past 10 years. Your business is the only one that has been successful, found a niche and always paid off. Daily was nothing but a struggling pipe dream 2 years ago. Fanduels active paying players in Q4 2013 (during NFL season) was 192k players. Granted Daily is growing, but with huge Churn rates, and the churners generally are not returning after they find they only lose consistently. Fanduel is estimating 40 million in revenue in 2014 and without being public, no one will know what that number means. That $40 million in revenue they tout, that's not what they are making in profit, that's their VIG on the entry fees, which is roughly 9%. They don't say what their expenses are. They also do not say what their "new" money fees/investments are, they cite entry fees, which most of the active players keep as a balance until they lose it all and just keep rolling over back into new entry fees. I wrote some time back there has to be reason all the daily's enticement deposits/promotions continue to rise- some are promoting, deposit 200.00 and they will match it. They feel comfortable matching because their data probably shows the avg player will lose all 400.00. According to FanDuel, 57 percent of its participants range from 21 to 35. Guys like the article mentions, are all over in Daily's and they enter now using different user names and such, so as not to be identified. The avg Joe cant compete with them. I'm not out to bash the dailys or Fantasy, but the numbers never lie, just like sports statistics and articles like the one in WSJ tell only one side of the story.

all I'm saying is that the WSJ article is way off in its numbers.

here's one link to FTSA data http://www.fsta.org/?page=Demographics. If I apply even there own numbers to 33 million fantasy players, it makes no sense at all.

There is full season fantasy players and daily players and some who play both.

The one thing about fantasy unlike other forms of paying and playing to win games, is that the amount of data, time and study to be successful in Fantasy is enormous. If you are not highly computer literate these days, able to use excel/access and other computer software proficiently, its highly unlikely the avg Joe can be successful, which then just brings it back to the fun aspect.

IMO if the 18-35 age group had better jobs and opportunities they wouldn't be sitting online trying to play and win at fantasy, amongst all their other online activities they spend time on. Its an interesting debate and as of today its in its infancy and the future of it being a viable business is TBD. All that being said, your business has the potential to grow, the higher stakes, full season leagues, but grow from what, 2000 players to 20000? Will CBS, ESPN, etc fill the high stakes niche and knock you out, who knows. I will add there is a sound business reason, CBS, ESPN have not attempted to enter the higher stakes business as of yet and I doubt they will.

[headhunters]

wsj is not off in its #'s- outlaw is. 1st- they include playing for free- you do not- and that is in rebuttal to their #'? geez. time to reboot because you need to include free players. i honestly don't know 10 men that don't play fantasy. heck- my daughter was in a league at u of i with 9 sorority sisters. btw- i always find it funny that they can find guys that are really really smart that are killing it in the traditional "gambling" situations like betting on football and baskets and say that is NOT a game of skill and the same type of guy winning in fantasy and it is because of his/her skill. they are all games of skill- but the skill is much less apparent in betting football or basketball- like keeping track of the refs or officials.

[Yah Mule]

Thanks for the link. I think anybody who ever looked at the owner list in their daily leagues instantly realized the guys who are stacking are greatly increasing their odds of winning. I found it interesting that Anderson bristles at the suggestion that what he does is analogous to gambling. I respect the amount of work he devotes to his business and his ability to construct an algorithm that produces results, but this is a semantic difference at best.

[Deadheadz]

Lies, damn lies and statistics.

If I deposit $50 and play 300 one dollar 50/50 games in DFS before I run out of money, did I spend $50 or $300?
Seems like whomever is quoting the statistics will always use the numbers which suit their argument best even if the numbers are both true and false depending on "how" you look at them.

I'm choosing to look at DFS the way I look at online (and live) poker. It's not too smart to try to compete against people who are at a much higher level than you are.

If only I could look at high stakes Rotisserie Baseball the same way I might save myself a lot of money. But Roto is the tantric sex of fantasy baseball. Going the whole season can be very satisfying even when you don't win.

DFS is more like wham bam, thank you ma'am...

...or porn...?!!

[TParsons]

http://finance.yahoo.com/news/fantasy-s ... 41954.html

Great read, JD. Thanks for sharing.

Daily Fantasy is nothing but one Big pyramid scheme... it relies on new players to come in and lose and is nothing more than constant regurgitation of winnings... but that's for another discussion.

anyone else got a best guess...

I hope you have some facts to back up claims like a "pyramid scheme" if you're going to make such accusations. If not, you're just degrading people that are attempting to run a legitimate business. People in the industry are trying to get rid of that "black eye" created by WCOFF, AFFL, and others. No reason to add on if you don't have facts to back it up.

Your business is the only one that has been successful, found a niche and always paid off.

Completely false. Much like your PED rants, you need to get informed before you spout garbage like this.

The one thing about fantasy unlike other forms of paying and playing to win games, is that the amount of data, time and study to be successful in Fantasy is enormous.

What other forms of "paying and playing to win games" are you speaking of? Enlighten me.

[Outlaw]

Your business is the only one that has been successful, found a niche and always paid off.

Completely false. Much like your PED rants, you need to get informed before you spout garbage like this.

Sorry I'll disagree with you, The NFBC/Stats IMO is a well run business, run by honest, good people!!!

[Outlaw]

Daily Fantasy is nothing but one Big pyramid scheme... it relies on new players to come in and lose and is nothing more than constant regurgitation of winnings... but that's for another discussion.

anyone else got a best guess...

I hope you have some facts to back up claims like a "pyramid scheme" if you're going to make such accusations. If not, you're just degrading people that are attempting to run a legitimate business. People in the industry are trying to get rid of that "black eye" created by WCOFF, AFFL, and others. No reason to add on if you don't have facts to back it up.

You are right I had a few facts wrong. I went on Draft kings and went right up to payment option, but then decided if I hit Submit and deposit my real $600.00 into my new account, I'll get a $600.00 Credit, so I'll have $1200.00 to use to enter the daily games. Only problem is, I have to earn that $600.00 by spending the real $600 first. But I'll be golden because after I lose my real $600.00 I'll still have $600.00 to try and make it back. sorry, but no one gives away that type of money for free.

I checked the other sites too, some are up to $500.00 matches now, all offer at least $200.00. Last year none offered more than 50-100. Do the math and ask yourself why? Fresh money is needed, remember, some players if they hit big do cash out. Cashing out is not what they want, not good for business.

Daily fantasy probably has a place, but maybe its just in the few dollar type of games. Anyone trying to enter large games with high payoffs, good luck! Maybe the FSTA should develop some standards for that business, code of ethics, things like not allowing the top Dawg players to use fake names and such.

[Yellow Ledbetters]

Another misleading thing DFS do is report how much people win but do so gross and not net. NFBC is guilty of that also, but the NFBC's leaderboard is for entertainment only and not a fundamental part of marketing like it is for DFS. It's misleading to say that "some guy in Detroit won $2 million playing fantasy sports last year" without indicating how much he put in.

DFS is fun but to assume it is a game of skill is a little ridiculous. The sample size is way too small for any algorithm to be that advantageous. So basically you have a group of informed people taking the money of the ill informed similar to poker. The only advantages are knowing the importance of various splits and watching weather closely (baseball).

Sirius XM's fantasy channel used to be worth listening to until they sold their soul and devote the majority of their programming to the daily player. Nothing is more ridiculous than turning on the radio on a Monday when there are 5 fricking games and listen to a couple of blowhards with a nominal understanding of statistics overanalyze every player for an hour. Bring back the old programming!

[Outlaw]

Another misleading thing DFS do is report how much people win but do so gross and not net. NFBC is guilty of that also, but the NFBC's leaderboard is for entertainment only and not a fundamental part of marketing like it is for DFS. It's misleading to say that "some guy in Detroit won $2 million playing fantasy sports last year" without indicating how much he put in.

DFS is fun but to assume it is a game of skill is a little ridiculous. The sample size is way too small for any algorithm to be that advantageous. So basically you have a group of informed people taking the money of the ill informed similar to poker. The only advantages are knowing the importance of various splits and watching weather closely (baseball).

Sirius XM's fantasy channel used to be worth listening to until they sold their soul and devote the majority of their programming to the daily player. Nothing is more ridiculous than turning on the radio on a Monday when there are 5 fricking games and listen to a couple of blowhards with a nominal understanding of statistics overanalyze every player for an hour. Bring back the old programming!

correct a mundo- all the daily's tout some of their players who win hundreds of thousands playing.. their ads/commercials are comical.. and agree XM is hard to listen to after drafting season is done, although I do like Greg and tom's weekly show because it focuses on the NFBC players/Game and they do provide unbiased information...

[Yellow Ledbetters]

correct a mundo- all the daily's tout some of their players who win hundreds of thousands playing.. their ads/commercials are comical.. and agree XM is hard to listen to after drafting season is done, although I do like Greg and tom's weekly show because it focuses on the NFBC players/Game and they do provide unbiased information...

I'm sure their show is good. Unfortunately it's not on during my hour long commute. I'm stuck listening either to Rotogrinders or Craig Misch (sp?) depending on what time I leave. It's June and Dr. Roto was already discussing football today. I've given up and just listen to MLB network mainly.

May have to check out the show if it's offered "on demand".

[Greg Ambrosius]

correct a mundo- all the daily's tout some of their players who win hundreds of thousands playing.. their ads/commercials are comical.. and agree XM is hard to listen to after drafting season is done, although I do like Greg and tom's weekly show because it focuses on the NFBC players/Game and they do provide unbiased information...

I'm sure their show is good. Unfortunately it's not on during my hour long commute. I'm stuck listening either to Rotogrinders or Craig Misch (sp?) depending on what time I leave. It's June and Dr. Roto was already discussing football today. I've given up and just listen to MLB network mainly.

May have to check out the show if it's offered "on demand".

Our show is available "On Demand."

I am on a Roundtable discussion about season-long fantasy games vs. Daily Fantasy Sports next week in San Francisco. It's Wednesday at 5 pm ET. In fact, SiriusXM Fantasy Sports Radio is dedicating a two-hour discussion on DFS that day, with the schedule looking like this:

DFS 360: An all-encompassing look at Daily Fantasy Sports on SiriusXM Fantasy Sports Radio
Wednesday 5-7pm ET, live from the Fantasy Sports Trade Association Summer Conference in San Francisco

Questions for DFS Leaders and Winners accepted on Twitter using #AskDFS

5pm ET – Hour 1

DFS 101, DFS Strategy: Jeff Mans & Ted Schuster

Debate: DFS vs Season-long: Jeff Mans (moderator), Chris Liss & Greg Ambrosius, Dan Back & Al Zeidenfeld *2 Segments*

Legal: Glenn Colton, Peter Schoenke, Stacie Stern

6pm ET – Hour 2

DFS Executive Roundtable: Dan Back (Host), Brian Schwartz (DraftStreet), Tom Griffiths (Fanduel), Jason Robins (DraftKings) *2 Segments*

Winners Roundtable: Dan Back (Host), Drew Dinkmeyer, Al Zeidenfeld, David Kitchen

FSTA Facts and Figures: Paul Charchian (FSTA President) & Rick Wolf

[Yellow Ledbetters]

I hope DFS does not take away from season long offerings. I think DFS is fun but not challenging. There is just so much more to analyze with season long than daily.

Greg-without asking you to divulge specifics has the NFBC felt any hit whatsoever from the emergency of DFS or in your opinion is DFS mostly additional revenue coming into the industry and not necessarily replacing season long.

I personally treat DFS as gambling and the funds I use come out of my gambling budget...completely separate from season long fantasy (I'm an accountant so I budget everything). if I get bored one night and want to enter a DFS I just bet less. I wonder if a large percentage of other people are switching from season long to DFS.

[Outlaw]

correct a mundo- all the daily's tout some of their players who win hundreds of thousands playing.. their ads/commercials are comical.. and agree XM is hard to listen to after drafting season is done, although I do like Greg and tom's weekly show because it focuses on the NFBC players/Game and they do provide unbiased information...

I'm sure their show is good. Unfortunately it's not on during my hour long commute. I'm stuck listening either to Rotogrinders or Craig Misch (sp?) depending on what time I leave. It's June and Dr. Roto was already discussing football today. I've given up and just listen to MLB network mainly.

May have to check out the show if it's offered "on demand".

Our show is available "On Demand."

I am on a Roundtable discussion about season-long fantasy games vs. Daily Fantasy Sports next week in San Francisco. It's Wednesday at 5 pm ET. In fact, SiriusXM Fantasy Sports Radio is dedicating a two-hour discussion on DFS that day, with the schedule looking like this:

DFS 360: An all-encompassing look at Daily Fantasy Sports on SiriusXM Fantasy Sports Radio
Wednesday 5-7pm ET, live from the Fantasy Sports Trade Association Summer Conference in San Francisco

Questions for DFS Leaders and Winners accepted on Twitter using #AskDFS

5pm ET – Hour 1

DFS 101, DFS Strategy: Jeff Mans & Ted Schuster

Debate: DFS vs Season-long: Jeff Mans (moderator), Chris Liss & Greg Ambrosius, Dan Back & Al Zeidenfeld *2 Segments*

Legal: Glenn Colton, Peter Schoenke, Stacie Stern

6pm ET – Hour 2

DFS Executive Roundtable: Dan Back (Host), Brian Schwartz (DraftStreet), Tom Griffiths (Fanduel), Jason Robins (DraftKings) *2 Segments*

Winners Roundtable: Dan Back (Host), Drew Dinkmeyer, Al Zeidenfeld, David Kitchen

FSTA Facts and Figures: Paul Charchian (FSTA President) & Rick Wolf

Good stuff Greg- should be interesting and nice to see Stats holding court too... I was in DFS last year for about a month, did OK initially, but it quickly became too much of a time taker. Being on the west coast, you need to be checking all afternoon for lineups and weather. The less I paid attention or missed on a lineup change or weather impact, it was pretty much guaranteed losing. I ran my account down and was done. I suppose if you are a player with a lot of time on your hands, you might have a fighting chance, but the sharks are everywhere, especially in the higher dollar 2-5 player games.

Personally, I don't see myself going back to it, and I prefer season long fantasy and the NFBC is the best of the best IMO.

[Quahogs]

The Dailys are like heading to a different bar every night looking for that one night quickie. Exciting when you hit but for the most part come home unsatisfied. Season longs are like a marriage. Honeymoon period at season onset but then settles in and has its fair share of ups and downs. Also in correlation with the divorce rate 60% can't wait till its over and have nothing to show for it but heartache and debt

[Greg Ambrosius]

I hope DFS does not take away from season long offerings. I think DFS is fun but not challenging. There is just so much more to analyze with season long than daily.

Greg-without asking you to divulge specifics has the NFBC felt any hit whatsoever from the emergency of DFS or in your opinion is DFS mostly additional revenue coming into the industry and not necessarily replacing season long.

I personally treat DFS as gambling and the funds I use come out of my gambling budget...completely separate from season long fantasy (I'm an accountant so I budget everything). if I get bored one night and want to enter a DFS I just bet less. I wonder if a large percentage of other people are switching from season long to DFS.

The entire industry is growing and hopefully DFS contests are bringing in new sports fans to the space. As I'll say on Wednesday, we continue to grow every year in the NFBC and NFFC and every year the one sport leap-frogs the other sport in total revenue. Even with added competition in the space for football and baseball, we continue to grow and grow. DFS contests could be viewed as competitors for that discretionary income in this space, but I think fantasy players -- especially in baseball -- will add those games to their season-long leagues.

The one area where you really have to tip your hats to these DFS games are the technology. They are obviously spending millions of dollars in promotional dollars, but they are also pushing the envelope in technology. Kudos to all of these games in that regard and it's going to make all of the pay-to-play fantasy contests push hard to keep up there.