Tuesday, August 17, 2010

Everything You Wanted To Know About Daily Fantasy But Were Afraid To Ask

With a little lull in the Buffalo66 Challenge, I decided to write up a little primer on some of the things rarely discussed in the daily fantasy world.

Just remember that my views are based on personal experience. You are welcome to disagree, if that's your thing.

So is this daily fantasy thing legal? It's gambling, right?

It seems like it's gambling, but legally, it's not. Thanks to an exemption included in the UGIEA portion of the Safe Ports Act of 2006, fantasy sports contests are legally considered a game of skill (providing the contests meet certain criteria).

There are a few places in North America where these contests are outlawed, so check your favorite fantasy site to see which states are fantasy "haters".

Is it REALLY a game of skill?

Yes, it really is. Especially over the long term. You can have bad luck on any given night - a QB gets injured on the first play, etc. But the players that win over a multi-year sample size are just better at daily fantasy than the majority of their opponents.

So the best daily fantasy players are the ones with the best information?

This is NOT true. It's definitely important to have good information, but that is only a portion of a winning strategy.

The best players also understand the rules better than their opponents. Knowing how the game is scored may sound obvious, but it's necessary to really pick a winning roster.

Equally important is game selection. Choosing contests that are winnable and offer either reduced rake or overlays. How you spend your fantasy money is just as serious a strategy as how you win your fantasy money.

If I want to win the most money, I should play the biggest games, right?

Wrong! Winning at daily fantasy is about PROFIT, not prize money. Here's a great example:

If I play an $11 3-player contest to win $30, I am risking $11 to win $19. If I play a $22 heads-up contest to win $40, I am risking $22 to win $18. Which do you think is the better proposition?

(I realize that the 3-way contest involves beating 2 opponents, but a good fantasy player will win enough of these to be profitable.)

I see you mention reduced rake. Is it possible to beat the rake long term?

The answer is YES. Now I don't care how good you are, at some point you will have a prolonged losing streak. (I'm talking a multi-month losing streak.)

When you gaze upon one of these long downswings and realize all of the rake you paid, it can seem like that's the difference between being stuck or unstuck. But the true winners always conquer the vig by practicing good bankroll management & sound strategies.

My best advice to combat the rake is to shop the sites for the lowest juice & take advantage of bonuses and affiliate programs.

So how much bankroll should I have?

I've always followed a 20 buy-in rule for heads-up contests. For example, if I want to play $10 contests, I would keep an available bankroll of $200.

Multi-player contests are trickier to gauge. If you enter a 5-player, you need to win 1 of 4 times to be profitable. To combat the variance, I would use a minimum of 4*(10 buy-ins) or 40 buy-ins. So to play $5 5-player multis, I would recommend a bankroll of $200.

That may seem like a lot for $5 games, but it is easy to have a long losing streak when you play so many opponents at once.

So you seem to know how to make money at this. How much can you REALLY make in a year?

Right now, that answer to that question is not too much. I would guess the best daily player out there could make $25-30k PROFIT annually, not counting any affiliate income. And that lucky player would have to run like GOD for 12 months straight, even with an unlimited bankroll.

The biggest obstacle to making huge money is the daily sites have very small traffic. You might clean up on one site in a month, but then the traffic stops or slows way down.

People don't want to play you anymore or they've gone busto and have no more bankroll.

So why do you bother with all of this if the profit potential is limited?

First off, it's not always going to be that way. Eventually someone will market their site correctly and daily fantasy will go mainstream.

Secondly, if you look at how much time it takes to play a contest - minutes to set it up - your hourly income potential is off the charts. If you did all the work to play one contest seriously, it only takes a few more minutes to play 20 more.

So what's it going to take to be a true baller at daily fantasy?

You mean besides owning a pimped out ghost whip?

It will really take consistent action at high stakes. This is the most frustrating aspect for me.

I can get $100-$200 games in baseball right now, but only one or two of those players will give me any action back in hockey or NASCAR at those stakes. When I know I can get regular action across all sports at those stakes, then I think the chance for someone to profit six figures has arrived.

I've had a standing offer on this blog to take anyone on up to $213, as long as they give me action 50 times across several sports.

What did I forget to ask?

I don't know, I can't read minds. Put it in the comments.


Anonymous said...

bankroll question..you mentioned a 20 buy-in rule..is that if you play 1 game a day? What happens if you played 4-5 games a day, would that then be 80-100 buy-in?

Also when is the new projections site coming??

Buffalo66 said...

No that bankroll is the same if you play 5 games/day. Just remember, if you play all 5 games vs. the same opponent, then in reality you a playing one $25 game.

The new Daily Fantasy Projections site is in limbo, I need some new tech help, so I may just revamp the old site. Planning a football season launch for sure.

SirFWALGMan said...

per your comment ABSOLUTELY! I thought Hooters was great. I mean it was not fancy at all.. but good sized room, clean, met my needs. The hooters magazine in the room was a wee sticky so be careful! I think I got some sick rate of like 18 bucks a night for a bungalow above the pool. It was a great deal IMHO.