The evolution of fantasy sports continues to be the leading story as the legislative landscape dictates where and what is considered a game of skill. This has created some fracturing of the market as well as some innovation to better serve the growing multi billion dollar industry.
With the amount of growth and money pouring into the industry we wanted to stepped back to ask players, “why do they play?”
This question gets answered differently depending on who you ask.
- You play for entertainment.
- You play for jack pots.
- You play to constantly make a profit.
To play any type of sports gaming (fantasy, straight betting, prediction markets, etc) assumes a level of enjoyment and entertainment for sports. If someone wants to play a $15 entry on Draft Kings on Sunday they are getting 10 hours of entertainment, regardless if they win or lose. Seems like a value play compared to going to a movie for the same $15 for only 2 hours and no popcorn.
And who can argue with the dream of winning a Millionaire maker? It’s the same mentality that goes into buying a couple lottery tickets and hoping you picked enough winning numbers to take the ladder to success, as Biggie would say, “escalator style”. Those players looking to float and take their shot each week in the big dance take on all of the risks associated with fighting the sharks, scripts, and daily variance. Sure, it’s fun to think about, but the reality is pretty simple, you’re not becoming a millionaire when the Monday night game ends.
For everyone else, which includes both pros and recreational players, the goal is simply to be constantly profitable. And that means Return on Investment “ROI” and win rate. ROI is the amount of return on your at risk amount and win rate being the amount of winning entries you need compared to total number you played.
We pulled a couple of formats to drive into the numbers and understand what it really takes to profit and are there different and better value profiles across the growing landscape of sports gaming platforms.
We’ve all played classic fantasy, nothing very ground breaking and the goal is probably closer to busting your buddies ball than it is winning money, though it’s always a nice addition at the end of the season if you do. That being said, let’s look at classic fantasy through an ROI lens:
- Entry: $100
- Competing Against: 11 Players (12 Total)
- 1st Prize: $1,000
- 2nd Prize: $200
HIGH LEVEL OVERVIEW:
- Top 16.67% of players will win money.
- Only 8.33% of players will win 1st place prize money.
- 1st Place ROI 90%
- 2nd Place ROI 50%
- Most classic fantasy seasons are 5 months
- This also does NOT include any money taken out of pots for highest score, most regular season wins, etc. which would dramatically cut into that ROI figure.
Playing a 12 person league at $100 entry and a $1,000 first prize would require you to win 1 out of every ten seasons to break even or a 10% win rate. The prize is substantial compared to the at risk (10X) but the time to collect when thinking as an investment hurts the overall format when looking at it for profitability.
LIVE EVENT TRADING ON BALLSTREET TRADING, INC.
We’ve brought in a new platform, BallStreet Trading, which allows players to day trade win probability in real time as live games are being played. Their software is a tournament style prediction market where users buy and sell shares of different outcomes. They are focusing on a flat payout for their players which they believe will help to create more winners and push more money into their ecosystem. They offer memberships to players that will give access to weekly real money contests.
- Entry: $25 – MONTHLY BALLSTREET MEMBERSHIP (TOP 20% OF FIELD GETS PAID)
- Competing Against: 4 Players (5 Total)
- 1st Prize: $100
HIGH LEVEL OVERVIEW:
- Top 20% of players will win money.
- Winning ROI 75%
- BallStreet runs weekly contests
Playing a real money contest with the $25 membership fee will pay out a $100 prize requiring you to win 1 out of every 4 contests to break even or a 25% win rate. Using the classic fantasy $100 entry base line you would win $400 for every $100 at risk on BallStreet. The 25% win rate for break even is interesting, especially if you think you have a large edge against the crowd in this win probability market format. A 75% ROI seems to be their draw to help create a flat and compelling pay out at the expense of a super jack pot. If you are able to stay ahead of the crowd here there is definitely consistent money to be made.
For all the true grinders we are looking at the heads up rooms on both DK and FD. An interesting format when we break down the unique heads up math for calculating ROI and understanding value. Keeping in mind a high amount of variance from the level of players you will likely be competing against the heads up format has both pros and cons if you are able to pick your spots.
- Entry: $100 – DFS HEADS UP
- Competing Against: 1 Player (2 Total)
- 1st Prize: $180
HIGH LEVEL OVERVIEW:
- Top 50% of players will win money.
- Winning ROI 44%
- Most DFS games are 1 day
Playing a Heads Up Contest at $100 entry and a $180 first prize would require you to win 1 out of every 1.8 contests to break even or a 55.6% win rate. How attainable is a profitable win rate of 60% for a 10% ROI hinges on many factors that need to be considered when deciding to play these contests, but none more important than “table selection”. As they say, it’s a hard way to make an easy living.
To keep things consistent we are going to look at DK and FD as a grinder. We have removed the GPP “big score” that could certainly skew these numbers. Whatever premium you are willing to place on your overall statistics to allow for the potential to win a large sum should be included for both the upside win as well as the constant down side you will face as you wait for the big score that may never come and eat into your overall profits.
When trying to quantify the profitably of the different games across both DK and FD we decided to assume the highest level of play to see how it stands up compared to the other platforms.
Looking at how a profitable professional DFS player performs an ROI of between 8-15% appears to be consistent with what people are describing online. How attainable these numbers are is certainly up for debate. The key with the DK and FD cash games is that they are never ending and if you are able to build up a large enough at risk amount you can start to really make some progress into making real money.
The underlying theme with any of these platforms will always be are you good enough to win at a rate that will become profitable over the long run. When comparing the different options that are available to players the first questions players need to ask is what style of contest will your skill set give you the biggest advantage.
Is it a season long format, daily fantasy style rosters, live trading of win probability, or head to head drafting?
If there is a debate across these platform for the best ROI we would consider the following to be the biggest factors for deciding where and what to play;
- Your perceived edge in the format (how good are you)
- Win Rate (ease of winning a prize)
- Length of contest (how long is investment in play)
- Raw ROI (how much can you win against what you risk)
- Prize (the amount of prize, i.e. jack pot)
When looking at each platform they all have their pros and cons and players should consider all of them against their goals and strengths. If your goal is consistent profitability there is definitely a path if you chose with your strengths first.Download the Free GoingFor2 App by Clicking Here...