I tried to think of a narrative thread to organize some of the thoughts I've had around daily fantasy sports, but there didn't seem to be one and since blogging is now reduced to only possible when the baby is napping, I figured stream of consciousness is better than no consciousness at all.
If you're any kind of football fan, it has been wholly impossible to escape the constant barrage of advertisements for the exploding world of daily fantasy sports. Enabled by technology and loose regulation, daily fantasy is already one of those things you keep seeing articles about because of all the interest in it as a new source of revenue. It's also the next step in evolution of fantasy sports, a medium which was already taking too much of our collective time, but is now quicker and much more focused on immediate gratification than its stodgier parent - season-long fantasy. There's a point about our culture in there, but there's no time to discuss it.
Whereas season-long fantasy sports require you to draft a roster and manage it throughout an entire sports season, daily fantasy is exactly as its name describes, over and done with in a day. You draft a team immediately, and play them immediately, and get results immediately...then you start over from scratch. It takes the emotional attachment of managing a team for months to creating new team after new team after new team, throwing the old away once the day's games are complete. Tinder, but for fantasy sports.
And as the launch of the NFL season hits (which has to be the biggest fantasy sport on the planet), all daily fantasy companies are desperately trying to lock in the largest share of players - many of whom are just discovering the format.
I'm one of those players, and if my experience is any indication, these companies (DraftKings and Fanduel are the most prominent) are really effective at finding me and blasting the crap out of me with ads. I've seen tons of commercials on TV, I've seen promoted tweets, I've heard live reads on multiple podcasts. I've also seen multiple billboards, ads on the sides of buses, and even ads on the loading screen on my Roku box.
The only choice I had to make was which of the hundreds of referral codes I used to sign up.
But as I'm starting an experiment with DFS (that's what the people in the know call daily fantasy), a bunch of thoughts have run through my head:
This reminds me, almost exactly, of the online poker boom of the early 2000's - It's eerie in its resemblance. Most new DFS players are probably too young to remember the poker boom, which was probably around 2002-2003, when everyone and their mother was signing up to play online poker. Enabled by technology, new players flocked to try and make some money on sites that advertised the crap out of themselves -- because when you're a gambling institution, all you need is customers and you're guaranteed to make a profit. Sound familiar? I wonder if DraftKings just went and hired all the folks that used to work for online poker companies in the US
It's exactly like the poker boom, except one small difference - DFS companies, taking a page out of the Uber playbook, has done a couple things to prevent the US government from pulling the plug on them (technically, its allowed in most of the country because it's a 'fantasy sports game' and technically classified as a 'game of skill' rather than a 'game of chance'). Now DFS may be temporarily classified as a game of skill, but there's no reason the government can't change it up as they see fit, or go after payment processors as they did with poker back in the day. But DFS is going with a two-pronged approach...the first is, 'get so big so fast that the government can't shut you down' which is textbook Uber. If you reach such a critical mass, then any move to ban you will be met with a ton of consumer resistance (look at DeBlasio's recent 180 on Uber in NYC as an example of how this works in practice). However, this might not be as effective as in Uber's case, as the consumer base is much smaller and under the umbrella of 'sin'. That's why DFS' second prong is all the more important - they've aligned themselves with the professional sports leagues just about as tightly as they can. The leagues have invested in these companies, teams now are sponsored by DFS providers, major media has integrated themselves via investment and partnerships (Good luck trying to read an ESPN fantasy article without it touching on DraftKings). All this makes it harder and harder for government to pull the brakes (note: that doesn't mean they can't tax the crap of out them).
If DFS grows like the companies want it to, why wouldn't they get taken to the woodshed by the tax man - Assume the DFS market gets so big that government decides they can't possibly stop it. That would be great, except 'sin taxes' are still largely OK in most people's view, and often the only type of tax that can get support from legislators and a majority of voters. No one really complains when cities/states raise taxes on cigarettes (except smokers, which few people even openly admit to)...and where gambling is legalized, you see it getting it's shit taxed to the hilt in many cases (because running a gambling operation, as I said, is a license to print money if you can get people in the door). Some might argue that this would limit the financial payouts of DFS companies and make the games worse, but I don't think that's true...because...
Barriers to Entry do not exist - There's nothing to stop me, you, or anyone else from opening a DFS company. My default fantasy league is in Yahoo, and when I did my draft this week you know what I got, an advertisement to play in Yahoo's DFS game. There is really nothing to stop anyone from jumping into the pool, as far as I'm aware, I don't think there's a license required to use a sports league's name/stats. That's another element from the Online Poker boom, where sites exploded so fast all trying to grab as many players as possible, because without players you have no prize pool and no company. That's why we're seeing so much marketing now, and why we'll keep seeing it as long as DFS is permitted. There's very negligible differentiation between DFS companies -- game formats are similar, game structures/payouts are similar, I'd bet the interfaces and payment processes are similar...but signing up for an account and depositing money makes a subscriber relatively sticky...so without any real differentiation, you need to grab as much of the land rush as possible...and here we are.
That legislation is BS, DFS are games of luck - Don't let anyone tell you differently because they're probably selling you something, but to call DFS a 'game of skill' seems pretty laughable. If someone wants to show me where the skill is, I'd love to see it, but I don't think it's significantly more/less skill than betting on games against the spread. Many of these sites advertise large competitions for big payouts (like $1M), and in these formats, everyone drafts a team and enters the pool, and the best lineup wins the prize. I looked at that format for about two seconds to realize that you'd need to pursue a high-variance strategy to have any prayer of winning in such a large pool. And you know what that's like? It's exactly like your NCAA March Madness pool. If you want to tell me that winning an NCAA pool is a game of skill, I'll laugh my ass off.
I also think it's impossible to argue there's skill involved in DFS other formats (at least when it comes to football). We'll test this theory, I'm going to give it a shot this year and see how it goes...but there's no way DFS could be anywhere close to something like poker in terms of skill vs. luck. The primary reason I feel that way comes back to variance. If you play online poker, you can play thousands and thousands of hands, and over that time, your results are going to calibrate based on your overall skill level. You can play thousands and thousands of times a day. If you're playing DFS for NFL football, there's a couple different ways variance works against you. In the first place, there are only 17 weeks of the season. So we'll evaluate your skill over 17 weeks vs. thousands of poker hands...do you think there's still going to be a lot of variance in how you do over 17 observations? And as a second point, in poker, there's absolutely no variance in terms of how the cards perform. An Ace is always an Ace. A flush always beats two pair. This is concrete and probabilistic. In fantasy football, your Ace might turn out to be a six. Your two might be a King. Your flush might lose to two pair, because there are tons of additional variables that impact the outcome. There's never a chance the King of Spades tears his ACL and doesn't appear on the flop.
So you have exponentially fewer observations in DFS vs. poker, and you have tremendous variance in the value of game pieces in DFS vs. poker. And you want to tell me winning at this is skill??? I'm willing to hear arguments to the contrary, but I don't buy it.
Having said that, I'm still excited to try it - I hope I prove myself wrong. And if you do want to play - use my referral link. Haha, another classic from the poker boom.