Monday, July 11, 2011

The Time Has Come for T$ In Daily Fantasy Sports

I've been reading a lot lately about some classic arguments in the daily fantasy sports world. These arguments are basically between the player and site owner/operators.

Argument #1: DFS is not a beatable game because the rake is too high. Bullshit. How do I know the game is beatable? Kaiseroll13, Primetime420, Fredotz23, etc. (Include me too, I've been profitable every year.) It's an indefensible retort, these guys have consistently crushed the games with a 10% rake.

I do think the rake should be reduced even though the game can be beaten at 10%. Rake should be similar to online poker which uses a 5% industry standard.

Argument #2: The rake in DFS is 10% because traffic and/or participation is not at a high enough level to support a 5% rake. Again, bullshit. The sites that run a higher rake are just making a cash grab, plain & simple. There are only a limited number of sites online and they'll stay with higher rake for as long as the market allows it.

Sites like Fantasy Factor and Fan Duel not only charge steep rake, but they also "dumb down" their contests by using simplistic rules. While this might be more user friendly to the novice, it's NOT attractive to a serious, profitable player.

So how can we find a middle ground? We need a way to lower the rake so more players can beat the game, or make their losses less of a burden on their bankroll. A new model is needed to help the operators rake in a less obvious manner.

What we need is T$ in daily fantasy sports.

For those of you that have not played online poker, T$ (tournament dollars) is money that can be spent on the site but cannot be cashed out. The two most popular methods of collecting T$ are:

-Turning in VPP/FT points for T$, or
-Winning a satellite to a bigger tournament and then unregister, thus getting the value of the buy-in in T$.

I do have to give credit to Draftstreet for offering vouchers for their street cred points. this is closest thing to T$ that DFS has right now.

However, we need some new models for the operators to present their product. Here are a few suggestions:

1) Monthly deposit bonuses in T$. This is a simple way to let the player know you are helping him out with the rake. Players can bonus whore to improve thier bankroll, but can't cash out the bonuses. This will hopefully put the player at higher stakes, eventually putting him/her in a position to generate more rake.

2) Allowing players to by T$ at reduced rake. Instead of paying $109 for a buy-in, I could buy a T$ voucher for $105. I end up getting a reduced rake on my buy-in and the site owner is guaranteed I will play a $100 level contest. This is win-win in my book.

3) I have mentioned this dozens of times before: ZOMG Holy Jesus Christ STEPS TOURNAMENTS Please! The site operators have no clue that this is the way to multi-rake players in a T$ format. Here's a quick example:

Step 1) 5-player $5 entry, winner gets $45 T$ entry into step 2.
Step 2) 5-player $45 entry, winner gets $205 T$ entry into step 3.
Step 3) 5-player $205 entry, winner gets $950.

The site gets to market the steps tourney as way to turn $5 into $950. They also get rake the T$ winners at each step.

As for a general view of the rake, I think the sites should rake the bejeezus out of the large field events, but for higher buy-ins or HU, they need to reduce the rake. I shouldn't be paying the same percentage of rake as a $5 game at the $200 level.

Hopefully the better sites will figure this out and it will help the industry as a whole. (Plus it will get Tippy to stop complaining.)

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