Daily Fantasy Sports Site Attract Pros, Squeeze Average Players
If you've been online or watched TV lately, chances are you've seen an ad for daily fantasy football. Those ads promise the possibility of riches that very rarely materialize for average players.
Web sites like FanDuel and DraftKings lure fans with the possibility of million dollar payouts, but it turns out the sites are havens for fantasy professionals and average fans hardly stand a chance.
For WOSU's sports show "After the Score", Thomas Bradley and I spoke with Joshua Brustein, who recently wrote a piece on daily fantasy sports league for Bloomberg News.
Click the play button above to hear their conversation
Steve Brown: If you've been online or watched T.V. lately chances are you've seen an ad for a daily fantasy football league websites like FanDuel and Draft Kings lure fans and with the possibility of million dollar payouts, but it turns out the sites are havens for fantasy professionals and average fans hardly stand a chance.
For WOSU's sports show After The Score Thomas Bradley and I spoke with Joshua Brustein who recently wrote a piece on daily fantasy sports leagues for Bloomberg News. He says both FanDuel and Draft Kings are buying ads with hundreds of millions of dollars in new investment capital.
Joshua Brustein: Both FanDuel and Draft Kings have raised an enormous amount of investment and have been spending it mostly on trying to get new users into the site through advertisements on television and Internet, I think they're on bus stops. I don't know, they're everywhere.
Thomas Bradley: They're advertising these huge payouts and some of the commercials we've seen is your average sports fan sitting at what looks like a bar or a sports book or something watching games and presumably winning millions of dollars. What are the odds or how are they making people believe this could be them?
JB: Right so there's a couple of things it is possible to you know place a small bet and when an enormous amount of money you could very possibly win one of these big jackpots. But what happens is over time your odds are very low and only a small number of players end up winning the lion's share of the money.
It's just like if you went into if you into a convenience store and bought a scratch off lottery ticket you know you might you might hit the jackpot once but over time you know if you just took that money and put it straight back into the next lottery ticket over time you're not going to end up with with a lot of money in your pocket.
TB: So how are these small amount of users that are winning the money how are they doing it?
JB: Yeah that's actually the one way where this is very different from buying a lottery ticket. Daily fantasy sports is you know it is it's a skill game. And the people who are better at it win and the way that you become good at this is by you know being very conversant in the in the actual rules of daily fantasy which are different from knowing a lot about football and then by being able to build predictive models about which players are undervalued or overvalued according to you know the markets that you're buying these players in.
These sophisticated players aren't trying to hit it big with one perfect line up what they're trying to do is enter a whole bunch of line ups and turn their money into, you know, 10 percent more and then do that every night.
SB: Joshua, when people hear about daily bets be it online or anywhere else they think of gambling and I know some state lawmakers are looking into this. Are daily fantasy leagues a type of gambling?
JB: So according to federal law this is explicitly not gambling when the rules regarding online gambling were written I believe in 2006 there was a specific carve out for fantasy sports at the time there was no such thing as daily fantasy sports the carve out about basically said you know we all enter our rotisserie baseball season and put in one hundred bucks and whoever wins gets to take the thousand and basically these the sites were built to fit within that within that carve out.
TB: Joshua, I think your tweet a couple days ago said it best, you said "public service announcement you're not going to make money playing one-day fantasy sports is that just the reality of it if you don't have advanced algorithms and statistical analysis on your side?
JB: Yeah I mean over time if you keep playing you will lose your money and that's not necessarily a bad thing if you you know if you find it fun but it is you know it is something to think about when you're you know when you're loading up that account.
SB: If you've been on the Internet lately or watched or listened to anything else you probably heard or seen daily fantasy sports ads. We've been talking with Joshua Brustein he recently co-authored a piece called "You aren't good enough to win the money playing daily fantasy football" Joshua thanks for your time. Thanks for having me.