Financial Times: Why Daily Fantasy Sports Games are for Suckers
The Financial Times of London featured a report Monday claiming that Daily Fantasy Sports are for suckers….and they are probably right. Granted some of these suckers end up walking away with millions of dollars.
It is so much harder to win big than most people think, writes Drake Baer of the Financial Times.
Daily Fantasy Sports are similar to the full season Fantasy Sports concept that has been around for decades. You assemble a team of players who you believe will perform well while keeping within a set salary cap. Should your players collectively total the best statistical number, you win.
With Daily Fantasy NFL, the contests are weekly as opposed to having to ride out an entire season. With Daily Fantasy NBA and Baseball, we are talking daily.
But with DFS, you are going up against hundreds – and sometimes thousands – of people. It’s like a College Football team outside of the SEC having to win all of its regular season games in order to qualify for the Playoffs then having to go up against an Ohio State or Alabama team.
From the Financial Times:
According to a paywalled survey of 1,400 DFS players that Eilers Research shared with Tech Insider, 70% of fantasy sports players report losing money. Insiders call these casual players "fish," since more advanced players — "sharks" — feed on their losses.
One shark, which Bloomberg described as a "fake sports apex predator," claims to risk about $140,000 every day — with an 8% return on investment.
More takeaways from the piece:
• A few people are "sharks." According to Miller and Singer, the top 11 DFS players risked an average of a whopping $2 million in entry fees and profited $135,000 per person over those three months, and the remaining people in that top 1.3% paid $9,100 and profited $2,400.
• The mass majority of people are "fish." "[Five] percent of players are the big fish; they lost $1,100 on entry fees of $3,600 on average," Miller and Singer say. "[Eighty] percent of players were the minnows; they lost $25 on entry fees of $49 on average."
What we are likely to see in the coming year or so are Daily Fantasy Sports players who become pseudo celebrities akin to that of the professional poker community.
The odds of an Average Joe reaching these lofty aspirations are close to zero though probably better than winning that huge lottery jackpot.
- Aaron Goldstein, DFS911.com