An overview of the DFS arena
An overview of the DFS arena
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Welcome Degen Gambler!
With most of our readership in America, we feel obliged to sometimes touch on the pieces of betting markets [& related markets] that are most relevant for US/CA people. The problem? Unless things work more or less the same as it does in the markets we’re active in, we don’t know much about them.
& unfortunately, it’s far from always that it does.
Therefore, we’ll try to add in occasional guest posts to complement our main content going forward, with insights into/overviews of more US/CA specific subjects. Examples include:
US Exchanges/P2P platforms [Prophet, Sporttrade, …].
US sharp bookmakers [Circa, Betcris, Prime?, …].
The Daily Fantasy Sports space.
PPH Sportsbooks & related multi-accounting procedures.
More recent versions of DFS, with prop bets essentially camouflaged as DFS to slip regulations [PrizePicks, Fliff, …].
Today we’ll start this off with a guest post from @BowTiedDFS on bullet point #3, The Daily Fantasy Sports space. Enjoy the read.
Note: If you’ve got decent experience in any of the above areas & wouldn’t mind sharing some of it, feel free to reach out to us on Twitter.
Welcome Anon,
If you’re curious about betting and have been around it or watched a sportsball game recently, you’ve probably come across one of the sportsbooks that also offers Daily Fantasy Sports products. You may have even played season long fantasy leagues with a bunch of your buddies for football, basketball, baseball or hockey. These were extremely popular back in mid 2000s when sites like Yahoo began offering a free site to run your league from, letting players draft a team, make trades and talk shit to one another about how little they knew about sports with bragging rights or a humiliating task on the line along with a possible prize pool that was settled outside of Yahoo.
This eventually evolved into what people know as Daily Fantasy Sports today. There was even a popular show based around a football fantasy league (called The League) that ran from 2009 to 2015. With this post, I will go through some of the key concepts you should know about before you put any action on DFS.
What is Daily Fantasy Sports?
Daily fantasy sports (DFS) is a type of online game where players build a team of real-life athletes and compete against other players in a single day or week-long contest. The object of the game is to maximize the score your team achieves within the limits of a salary cap, positional requirements and the games within what is known as a “slate”. The winner of the contest has the highest score based on those criteria. There are different types of scoring systems, criteria, game types and payout structures that are all slate dependent and can vary by site. Some of the other less well known games are prop betting games or Best Ball games that have their own criteria and strategy which I won’t really get into for this post.
Most of what you will see advertised for these games are the high payout ($1 million to first or Milly Makers) on the large sites. This is the easiest way to get eyeballs on the product and possibly get people to download the app and play.
An Overview of Them Thar Hills
DFS began in 2007 and there have been a few players come and go since then but the major players in the space should be no surprise to anyone. They are DraftKings (which was founded in 2012) and Fanduel (founded in 2009). These sites have the biggest prize pools, the biggest fields and the most sports offered in the DFS space as well as the best overall user experience on their apps (there are rumblings that Fanduel has dropped off considerably due to focus on their Sportsbook).
Newer players in the traditional DFS space include Yahoo, Fanball, SuperDraft and Ownersbox. Each has their own scoring system and salary structures but the overall game is similar to the DraftKings and Fanduel games with the major drawback being smaller prize pools (but this has other advantages).
The other thing that has popped up due to government regulations (which vary state by state or country by country) are the aforementioned prop betting sites that also contain a DFS element to them. These sites are often seen being pumped by touts within the industry due to affiliate promotions. The main ones are PrizePicks, Underdog Fantasy, Parlay Play and Sleeper. DraftKings also has a new product called Pick6 which is new to this market. Games are based on the number of props you choose and contests are (like DFS) peer to peer with a rake taken. These have their own intricacies and strategy but I am georestricted from playing these games and am unable to speak authoritatively on them as I am with DFS.
Back to traditional DFS
For the major sports (basketball, baseball, hockey and football), there are three game formats:
Classic
The oldest and closest to the season long fantasy game format. There are a set number of roster slots with position requirements that need to be filled with players under a set salary cap. Each slate features players from a set number of real games that happen that night. Some slates will only feature late games or games that start at a specific time but overall the biggest prize pools are what are called “main slates” and feature all of the games from a specific sport that day or possibly weekend (in football).
Showdown
These exist in several different formats. Overall they are based on a single game from that day. Some have a Captain format where you can select a player as your captain and their points count for 1.5 to 2X. On some sites that means the captains have the same multiple on their salary, on others, they don’t. This is site specific.
The next differentiation in this game mode is whether your roster consists of 6 (DraftKings) or 5 (Fanduel, Yahoo, Ownersbox, SuperDraft) players.
Tiers
This is a DraftKings only product and you choose one player from a group of players in each tier (no salaries).
And there is two styles of play (separated by pay structure) available for all of these formats: Cash games and GPPs (guaranteed prize pools).
Cash Games
Games that are considered cash games are head to heads, 50/50s, double-ups, triple-ups, 20 mans, 100 mans, 3 mans. These games have more limited upside than GPPs and the goal of them is to finish in the top 50% to 30% of the field and you get paid out a smaller multiple on your action.
The most popular cash games are 50/50s and double ups. In these contests, the prize is the same for everyone that finishes above the pay line as opposed to GPPs that have large payouts up top and you need to finish in the top ~10% to get paid out.
GPPs
GPPs or Guaranteed Prize Pools are the big tournaments with big prize pools that pay out a large amount to the top finisher. These are the flagship games on each of these sites and can have hundreds of thousands of entries. This style is where you find the Milly Maker contests ($1 million to first), The Fadeaway (Basketball), The Slant (Football), even down to the quarter jukebox ($0.25 entry fee) and the dime ($0.10 entry). The point is, there is a multitude of GPP style contests that vary by entry fee (anywhere from ten cents per entry to thousands of dollars), size of prize pool and the number of maximum entries.
All of these things are important to pay attention to because there are edges to be gained from knowing which contests are the most beatable and how to beat them, which I will cover in the next section on edges.
Why DFS could be worth looking into for!
I always tell people, if they want to get into DFS, start with Bonus Rugging. At the very least, bonus rugging will give you a decent sized bankroll that you can allocate a portion to DFS instead of burning a hole in your wallet by trying to learn with your own money. Bonus rugging is the biggest edge that currently exists in either world, so take advantage of that while the bonus money flows.
Aside from that, here are some other simple edges worth looking into to make some money from DFS.
Beginners Edge
The biggest edge currently in DFS and probably always will be is playing against other beginners. Most, if not all sites have beginner only contests that you can enter. These are generally cash games but with these games, you have the potential to 10X or 20X your entry fee if you win. The biggest advantage to these are flatter payouts, obviously lower competition and a much higher potential for going up against dead lineups (someone plays someone who is injured or pre-registers and misses lock, entering an empty lineup).
Maximize these while you can, they are a gift to you if you use some of the other strategic edges listed here.
Timing Edge
The next edge requires timing and a bit of awareness. This is cash games where you register about an hour before lock (lock is when the first game of the slate starts and the contests start officially). Again, this is where you will find the weakest competition. Casual players that are going to enter a bunch of lineups while they are on the toilet after supper or are just getting home from work etc. You rarely find pros in these contests. The good news is that you can check the lobby of the contest before you register in order to see if any sharks are in there. Each site has a badge system that lets you know who the regular players are but I normally look through the head to head lobbies for names of people that are offering multiple head to head contests against them. Stay away from those players, they (for the most part) know what they are doing.
Overlay Edge
Another edge you can exploit in GPPs is something called overlay. This is usually more likely to happen on the less well established sites than it is on DraftKings or Fanduel.
What happens with overlay is a contest doesn’t look like it is going to fill but it is a Guaranteed Payout (GPP) so the payout structure remains the same. For simple math, let’s say a single entry GPP has a maximum 1000 entries with the top 10% (100 people) getting paid out in prize money. But it looks like only 500 people are going to enter the contest. The top 100 people are still getting paid out, meaning 20% of the entrants are now going to get paid. As a bonus you only have to beat 500 lineups instead of 1000, increasing your odds of getting a larger payout.
News Edge
Next time you call an athlete a pussy or get mad at some bandaid boy going back on Injured Reserve, step back and remember, this is an edge for you in DFS. Most sports are a next man up type of situation and when someone goes down (especially in sports like basketball and football) there is usage that is going to go to some dude you’ve never heard of that is minimum priced and will come out of seemingly nowhere and nuke a slate (Malik Monk won me a very large prize pool when he played on the Lakers because of this, Lebron and Anthony Davis were both ruled out).
This used to be much more common, but this edge is much more widely known and the sharper the field, the less of an edge this is. The only time this isn’t the case in a sharp field is when the news comes out too late for people who max out their entries across multiple slates to be able to react to the news.
The cousin of the News Edge – Late Swapping
There are currently efforts underway from DFS operators to remove late swapping from their contests but as of right now it still remains. This is a bit of a sticky subject among the DFS community but it is an effective tool to keep in your arsenal. The main things to remember are to make sure you put players in your flex positions that play in the latest games possible. That way you will be able to react to late injury news accordingly.
There are other strategic ways of late swapping and I may write about those another time but doing the above alone will give you a significant edge, especially against weaker fields.
Ownership Edge
Remember, DFS is a game you play against other people and the book just takes a rake. Knowing the likelihood that the field is on a specific player or players gives you the advantage of being able to choose a similar priced player with a similar range of outcomes. Your player goes off and the chalk (a player highly owned by the field) has a mediocre game and you will find yourself near the top of the leaderboard more often than not.
Projections and Optimizers
For the most part (aside from baseball) player projections don’t vary all that much from provider to provider, I have my recommendations below but these aren’t as valuable as they used to be. An optimizer combined with decent projections is worthwhile, even for a hand builder. Using these tools will give you an idea of what the good plays are for the day and help you understand where you can find value and how to build your lineups (roster construction).
The edge here is that there is still a portion of the field that are walking into it blind and building lineups based on their favourite players. They are playing the lottery, while the sharps are playing chess.
Game or team stacking/correlation
This is especially effective for baseball, football and hockey. Basketball is the exception because most scoring events in basketball are negatively correlated (someone scores a basket, that means someone else didn’t). In these sports, there is a positive correlation between members of the same team and/or game. Because of the nature of the sport and the way scoring works, events in the game correlate together. A touchdown is thrown, another player has to catch it. A homerun is hit, other players could be on base.
For example, a quarterback throws for over 300 yards and 4 touchdowns. That’s a monster game for that quarterback. You’re playing against someone and he has a quarterback that has an even better game but they didn’t play him with any of their receivers, tight ends or running backs (played a lotto lineup). But you played your quarterback with his number one receiver and his tight end.
Who wins?
If your QB threw for over 300 yards, let’s say 100 went to the receiver and 100 went to the tight end. Also three of the touchdowns went to those players. That’s 38 extra points that got double counted because you correlated your lineup. Unless the person you faced is a time traveller, that is tough to beat.
Using the Sportsbooks to your advantage
This is now a minor edge but instead of trying to figure out where big scores might come from, the Sportsbooks will flat out tell you. Study game total lines to see which game environment is most likely to produce the most scoring. Sportsbooks post Over/Unders that will tell you basketball game A has an expected 240 point total and basketball game B has a 200 point total. If I’m deciding which game I want to have players from it is most likely game A.
Contest Selection
The next edge that really helped me was the idea of max entering smaller stakes (quarter jukebox and $1, 20 max) in order to build a bankroll rather than putting single entries into the Milly Maker. As I got better, I started entering larger stake 3 max or single entry contests along with max entering larger prize pool 20 max contests. It only take a couple thousand dollars to comfortable do that on a freeroll basis for years as long as youre disciplined with your bankroll and have contests that you have a chance at winning every few months.
A note on Rake
If you have played poker, you have seen the dealer count out a percentage of the pot and put it in their little lock box at the table. This is called "rake", it is the fee that is taken to run the card game.
The Rake or margin in DFS is the part of the entry fee that a Daily Fantasy Sports site takes in order to run the contest and the website. When entering a DFS contest, a percentage of 5% to 15% goes directly to the contest organizer.
When you are just starting out, rake won't really be a big deal to you but it is worth noting. The less rake you pay the better, obviously. When you are selecting contests, there will be no rake contests which are worth looking out for while you are looking for overlay.
An easy example of rake is in cash games. $1 entry 50/50 or double up makes for easy numbers. If you enter a $1 head to head contest, your pay out for winning will be $1.80 (10% rake). If you enter a $1 double up, the payout is $2 but that contest will only run if it fills to 11 players (also 10% rake).How to get started
Both DraftKings and Fanduel (and all other sites) are pretty easy to sign up for, all you have to do is create an account and deposit money. There are plenty of contests to choose from but I would allocate most of my bankroll to the beginner contests and micro stakes to start with.
Some final notes
The second part of the DFS landscape that I didn’t discuss earlier but you should know about is the proverbial shovel salesmen. I won’t go too far into this here but to make an analogy, during gold rushes, the most profitable businesses were the people selling picks and shovels to aspiring gold miners. This being a form of gambling (even though it really is a game of skill), there is no shortage of degenerates that will try to sell you lineups or projections in order to fund their own degeneracy. There are also plenty of good sources of data out there as well so it isn’t all bad, just something to be aware of if you are thinking of heading down this path.
My rule of thumb is putting that investment in companies that will aggregate data for me. I typically stay away from companies or people that are looking to sell you lineups or plays to make (which would make you lose in the long run anyway).
My recommended providers are:
Paydirtdfs.com – Site can be a bit overwhelming if you don’t know what you’re looking for but the data is accurate and James’ ownership projections are top notch.
Stokastic.com – I started using Stokastic several years ago when it was still awesemo.com (named after one of the best DFS players of all time, Alex Baker). They have great tools and are very helpful for getting you up to speed on key concepts. I often use their Boom/Bust tool in order to get an initial direction of where to attack a slate.
TheSolver.com – Syncs or uploads projections from partners such as paydirt or stokastic and provides you with both an optimizer tool and/or a sims tool.
Free tool – rotowire.com has projections and a free but limited optimizer. Wouldn’t recommend using them beyond beginner or very low stakes contests.
How to keep from getting scammed
For the most part, the big sites have a pretty good handle on scammers. There have been some historical scandals like the former DraftKings employee who got caught using actual ownership data to create his own lineups and winning money from it (Ethan Haskell). Or the different collusion scandals; bachelorgate – a pair of players who were also on the TV Series “The Bachelor” got caught colluding in a Milly Maker contest when the wife of the duo actually won the contest. There is a rule against multi accounting in order to increase the number of lineups you can enter. The max is 150 for the biggest contests. They got caught because the data showed there was very little overlap between their 300 lineups. The woman had her prize money taken back as a result.
There are syndicates that exist that still do this but this is more of a high stakes issue. Stay out of cash game lobbies (especially 3 man) where you see the names Moklovin or KobeforMVP, there are a few others but it still exists. You can look up who the scammers are online because other players are the best at policing this. If you ever notice that you’re in three man games where the other two lineups are never duplicated over multiple games, there is a good chance you’re being hustled.
Most of the crypto sites are pretty dodgy so it is best to stay clear of those unless you want to gamble on whether or not you’ll get to withdraw.
Stick to the sites I’ve listed and you should be fine.
Tax rules
If you live in the US, you have to pay taxes on your winnings. The sites all track this and provide you with the appropriate paperwork you need in order to file your taxes. If you live in Canada, your winnings are tax free. If you live in Ontario (a province in Canada) you are geolocked from playing but are able to join contests if you are physically located in the states or another province.
Make sure to check over your country or state regulations on taxes or legality (some states are in the same boat as Ontario). All of the sites post this info in their FAQs as well.
This is all very straightforward stuff and if you’re interested in learning more about DFS, I will be starting an email newsletter in the next couple of months that will go through different DFS topics. Follow me at @BowtiedDFS in order to get on the waiting list for it and I will get you sorted out. For now any question you have will be answered there and I can send you referral links in order to get bigger bonuses to rug for both sportsbooks and DFS.
Concluding BowTiedBettor comments
Thanks to BowTiedDFS for a great overview of the DFS landscape.
A few of the games/contests seem very similar to standard ‘horizontal’ pools [e.g. find the winning horses in a predetermined set of 8 races] & if you manage to develop something profitable here you should definitely try mapping such thinking/strategies to the more traditional segments of the betting markets.
Conversely, studying how top gamblers approach horizontal pools should yield valuable insights & help sharpen your DFS skills.
All for today,
Until next time…
