Daily Fantasy Sports, or DFS, is a cross between fantasy football and legalized gambling. On a broad level, DFS contests are a subsection of fantasy sports. Players compete against their friends, or more often complete strangers to build a team of professional athletes under a given salary cap, and try and to outscore their opponents. Daily fantasy sports differ from traditional fantasy sports by having contests that last for an evening or the weekend, as opposed to having the same team for months. Daily Fantasy Sports have grown in popularity over the last few years, and are now legal in 41 states. Daily Fantasy Sports are legal because they are considered a game of skill, as opposed to a game of luck or chance.
Who are the leading DFS Companies?
Daily Fantasy Sports started in the late 2000s, and as of today Boston-based DraftKings and New York-based FanDuel control over 90% of the DFS market. The two industry leaders are currently fighting for DFS market share while expanding into legalized sports betting. DraftKings released the first mobile sportsbook app in New Jersey in August 2018, with FanDuel following soon after.
FanDuel was acquired by the UK-based sports betting giant Patty Power Betfair in May 2018. Both DFS companies are rampantly partnering with casinos located in states with legal sports betting. It is estimated that both DraftKings and FanDuel have over 1million monthly active users, and eight and six million registered accounts, respectively.
Are Daily Fantasy Sports Legal?
Daily Fantasy Sports are legal in every state except Alabama, Arizona, Hawaii, Idaho, Iowa, Louisiana, Montana, Nevada, and Washington. Daily fantasy sports are legal because they are considered a game of skill as opposed to a game of luck.
Why are Daily Fantasy Sports Considered a Game of Skill?
Daily Fantasy Sports are considered a game of skill because only a small portion of all users win. Professionals can able to use algorithms to determine the best players to draft based on hundreds of data points and variables. Because of this, only 25% or less of active users will end up at a net-win or net-breakeven when measured over time. Unfortunately, it is incredibly challenging for the average Joe to come in, make a few picks, and strike it big. Both DraftKings and FanDuel post the average winning percentages for users on their websites and should be viewed before placing money with them.
Winning Chances for the Average Player
It’s worth noting that the average player has relatively low chances of winning. In my personal experience, I have won at a few head to head beginner contests, with limited luck outside of them. I am the average Joe (literally) when it comes to Daily Fantasy Sports. I follow sports enough to feel confident making lineups, but I realize that most people entering lineups do it far more often and with far more prior research.
Both FanDuel and DraftKings list statistics that display percentages of net winners, break even, and losers over a period of time. About 75% of users break even or lose, with the other 25% winning. It is crucial that new DFS users understand this. Playing with friends in leagues or beginner contests are both great ways to keep the level of competition
Below is a breakdown of a typical NFL contest, how a lineup is constructed, and what the prize payouts are.
This contest is all DraftKings property
Contest Name: NFL SHOWDOWN $5 TRIPLE UP
Number of Entrants: 31 Entry Fee: $5 Total prizes: $135 Prize Payouts: 1st-9th = $15 10th-31st = $0
In this contest, 31 players can enter, and the top nine will win $15, which is triple their $5 buy-in. The typical NFL lineup consists of 1QB, 2RB, 3WR, 1TE, 1FLEX, and 1DST. Players are given $50,000 of virtual salary to draft their team, with players ranging in price. In a typical contest, the worst available player might cost $2,000-$3,000 while the best player might cost $9,000-$10,000. Below is an image of a sample lineup.
In conclusion, Daily Fantasy Sports are a fun way to bet a couple of bucks, especially if you watch multiple games. If you are interested in Daily Fantasy Sports, check out our DraftKings and FanDuel reviews.