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How the Daily Fantasy Sports Industry Turns Fans into Suckers

178 pointsby scottfrover 9 years ago

18 comments

swansonover 9 years ago
Funny enough, the automation&#x2F;optimization&#x2F;scripting&#x2F;algorithm aspects of DFS are a big part of what makes it interesting to me. I have domain knowledge about sports, so DFS is a better testbed for me to learn and explore these areas than, say, automated stock trading.<p>It&#x27;s a great place to practice linear algebra, machine learning, forecasting and projection models, web scrapping, data cleaning&#x2F;normalization, and API wrangling. And all without needing a brokerage account, minimum account balance, or transaction fees!
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pavel_lishinover 9 years ago
&gt; <i>The difference between the D.F.S. high roller and the blackjack whale, of course, is that the whale is trying to take millions from a multinational casino corporation and not from the honeymooners from Fresno who are betting away at the $5 tables.</i><p>I don&#x27;t understand this bit. What&#x27;s the difference? The casino is taking money from those honeymooners; and it&#x27;s paying it out to the whale. The whale negotiates rules that are different than those that apply to the honeymooners. How is this different than the DFS whales?<p>Is the only difference that FanDuel&#x2F;DraftKings allow players to engage in one-on-one challenges, vs. playing against the house?
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cfcefover 9 years ago
So the problem with this gambling site, which defends itself as being a game of skill, is that some players are far more skilled than others and so win regularly. I see.
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roldieover 9 years ago
Daily fantasy sports are like poker. There is an element of skill in each, and you&#x27;ll see the same skilled players win consistently.<p>However, based on my anecdotal evidence of being a fantasy football player (but not DFS, admittedly) and having formerly spent lots of time in online poker rooms, poker involves more skill than DFS. In poker you &quot;play the player, not the hand.&quot; But in DFS, there is no equivalent. So I would argue poker, a game classified as gambling, involves more skill than DFS.<p>--<p>There is also this article about games of skill. While not completely related, I find it interesting that casinos are trying to find games that people think they are more skilled at than the average joe, and can therefore think they can win. <a href="http:&#x2F;&#x2F;www.npr.org&#x2F;2015&#x2F;04&#x2F;29&#x2F;403094845&#x2F;casinos-switch-out-slot-machines-for-games-of-skill" rel="nofollow">http:&#x2F;&#x2F;www.npr.org&#x2F;2015&#x2F;04&#x2F;29&#x2F;403094845&#x2F;casinos-switch-out-s...</a>
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trequartistaover 9 years ago
Here&#x27;s John Oliver&#x27;s take on the daily fantasy sports industry - <a href="https:&#x2F;&#x2F;www.youtube.com&#x2F;watch?v=Mq785nJ0FXQ" rel="nofollow">https:&#x2F;&#x2F;www.youtube.com&#x2F;watch?v=Mq785nJ0FXQ</a> (probably some NSFW language)
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mschuster91over 9 years ago
The usual problem with gambling: regulate it too much and people will flock to somewhere else, quite often somewhere where the odds are lower towards the gambler than before.<p>Like with drugs, booze and smoking: banning is not a solution, especially not in our hyper-globalized world.
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acconradover 9 years ago
I always have to preface these opinions with &quot;I used to work in the industry&quot; (I was a developer for a site that got acquired by one of the 2 outfits mentioned), so take this with a grain of salt:<p>This guy was destined to be a sucker. It&#x27;s not that DFS turned him into a sucker, it&#x27;s that he has a gambling problem - he says this in the beginning of the article! Why do we need to read further, it&#x27;s pretty clear from that statement alone he&#x27;s not going to do well in the long run just knowing the psychology of a gambler like that.<p>And to be frank, he isn&#x27;t very smart with his money either. He&#x27;s doing a lot of things that are increasing his risks and destroying his bank account which could be fixed with some simple statistics and discipline (which, for someone with a gambling problem, would be almost impossible).<p>The way to not lose money like the author is employ many of the same tactics you would with investing:<p>* Put in only what you can afford&#x2F;feel comfortable losing<p>* Stick with the Kelly criterion[1] and never bet more than 10-20% a day<p>* Diversify - instead of 1 $20 H2H game like the author, play 10 $1 H2H games and 10 $1 50-50s. Now instead of flipping a coin once to make $40 all or nothing, you get to flip a coin 20 times, and each win gets you $2, which can mitigate some of your losses.<p>Now to be fair, that last example is a bit inaccurate - because each coin flip is not an independent flip like in a true coin flip, because if you use the same lineup, and that lineup performs poorly, it&#x27;s like having a weighted coin severely against your favor, but at least with H2H matchups, you know that some people can bomb worse than you, whereas in 50-50s, since you only have to do better than half, in a large sample size, you likely won&#x27;t win any of your 50-50s since the median score is roughly the same across all of them.<p>My point is two-fold:<p>1. DFS doesn&#x27;t turn people into suckers, they already were suckers&#x2F;gamblers and didn&#x27;t do their homework and practice discipline, which brings me to my next point...<p>2. DFS <i>is</i> a game of skill - for an exaggerated example, it takes a basic level of competence to choose Tom Brady over his backup, Jimmy Garoppolo. You can be almost certain he will play, as he&#x27;s pretty much played every game in his career except for an injury nearly a decade ago. But DFS is <i>also gambling</i>. We know it is, but saying it&#x27;s legal gambling won&#x27;t bring on new customers. It takes a lot of work to say &quot;100% Legal&quot; all over your site and still not have people sign up.<p>The US is a funny country. We don&#x27;t legalize online poker but we legalize in-person poker in casinos all across the country. We legalize DFS but not online poker. Where is the logic in this?<p>For the HN crowd, if you want to try it and you like sports stick with the above advice: don&#x27;t play if you have a proclivity for compulsive or irresponsible gambling. Don&#x27;t put a lot in (and only put in funny money, nothing you would otherwise use for say, your mortgage), and exercise a bit of statistics and probability theory so you mitigate some of the risk. If you do that, you won&#x27;t become a sucker.<p>[1] Kelly criterion - <a href="https:&#x2F;&#x2F;en.wikipedia.org&#x2F;wiki&#x2F;Kelly_criterion" rel="nofollow">https:&#x2F;&#x2F;en.wikipedia.org&#x2F;wiki&#x2F;Kelly_criterion</a>
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morganteover 9 years ago
If it&#x27;s gambling, people shouldn&#x27;t be able to consistently and skillfully win at it.<p>Fantasy sports is much closer to the stock market than casinos. There&#x27;s a lot of luck and speculation involved, but you can carve out an edge through skills.
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coldcodeover 9 years ago
If you can submit multiple lineups via scripts, how can they not detect this? Do they use multiple accounts? Or is it just a desire to look the other way by the companies?
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cladariover 9 years ago
The exemption exists purely from the lobby efforts of the NFL and MLB. The original bill contained no such exemption. The loop hole was added in committee.
radikalusover 9 years ago
&quot;Listen, here&#x27;s the thing. If you can&#x27;t spot the sucker in your first half hour at the table, then you ARE the sucker.&quot;
vincentleeuwenover 9 years ago
Interesting read. I don&#x27;t think its too different from your average financial market though. Lesson 101 in finance is that money flows from private to institutional investors. It seems this is the case with DFS too.
Animatsover 9 years ago
The beauty of fantasy sports is that it converts sports fans, a subculture noted for excessive enthusiasm, into suckers. That&#x27;s a feature, not a bug. Think of it as monetization of the sports sucker demographic.<p>From the industry perspective, they don&#x27;t care who wins. They&#x27;re a pari-mutual operator; the players bet against each other and the house takes a cut, like horse racing. This is different than casino gambling, where the players play against the house and the house can lose. That&#x27;s why casinos don&#x27;t permit blackjack card counting. FanDuel doesn&#x27;t care how you plan your bets.<p><i>&quot;91 percent of the prize money was won by a mere 1.3 percent of the players.&quot;</i> Right. There&#x27;s a sucker born every minute.
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GeorgeMatthewsover 9 years ago
Woh! I didn&#x27;t believe that, Seriously!
zw123456over 9 years ago
I don&#x27;t think there is all that much difference between fantasy sports and wall street. In both cases there is an element of skill (however small that might be) and luck. In both cases there are people with more skill and resources that are profiting off less skilled or knowledgeable insiders. Really it is the same thing almost. Maybe that is what is making NY nervous? They have a new competitor to wall street &#x2F;s
FussyZeusover 9 years ago
Gambling is stupid tax, end of discussion. Anything bigger than poker night with the fellas and you&#x27;re going to get screwed, one way or another.<p>The real suckers are people who still think easy money exists when you aren&#x27;t a billionaire.
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laurentogetover 9 years ago
&quot;turns fans into suckers&quot;?<p>I would think spending time and money watching millionaires wearing shiny spandex pants give each other brain trauma in billion dollar stadiums paid with our tax money makes us suckers regardless of the existence of Fantasy Football.
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Grishnakhover 9 years ago
I don&#x27;t get it. Weren&#x27;t sports fans already suckers long before this?