Tuesday, March 06, 2012

What Really Needs To Happen In Daily Fantasy Sports

There is ongoing discussion over what will trigger the "explosion" in daily fantasy sports that most industry experts are predicting.

The most popular opinion is that the large field events with blockbuster prizes will attract the most attention. However, this really hasn't been the case up to now.

For example, how has Beermakersfan $75k win in the FFFC really helped the industry? While the victory was a great story (and couldn't have happened to a nicer guy), does it really create more full time players for the site? Does it create more churn for the site? Not likely.

My feeling is the sites run these tourneys to try and recreate the "Moneymaker effect" that happened in online poker. Once Moneymaker's story of turning $40 into a WSOP win became public, many casual players tried to follow suit.

So how exactly can DFS follow that model? I'm not sure that they can, at least at this point. If you were to continue down this path, sites will have to offer much larger tournaments, probably larger than their traffic can afford to support. Unlike poker, DFS prize pools are fixed, meaning that they risk a huge overlay to try and run a tourney on a WSOP scale.

Another drawback is the sites usually rake these huge tourneys over 20%, almost twice what a WSOP event rakes.

So how can DFS grow exponentially without the giant donkament?

The answer is simple - nosebleeds. The sites need to develop high stakes regulars. Two things required to make this happen:

-An incentive for current regs to move up in stakes.
-Transparency for both winner and losers in high stakes contests.

Let's go back to the poker analogy for a second. How many sites/forums are dedicated to railing high stakes cash poker players? Their winning/losing sessions are meticulously recorded & rehashed. There are so many fanboys of these games, that would give almost anything they have to be a part of it.

If the DFS sites offered greatly reduced rake for high stakes games, it would help generate more big games. They could also offer RB on games over a certain buy-in. But they need to find a way to steer their high volume players towards those games.

Knowing who are the biggest winners AND losers at high stakes is also crucial to the equation. Whenever high stakes game run on the sites, they should be promoted and blogged.

Remember when Kaiseroll13 "won $17k on Fan Duel in a month" campaign was running? That number has easily been reached on a weekly, if not daily basis by many.

It seems like that was a silly marketing ploy, but I bet that it brought more growth to the site than any tournament. (By growth I mean churn, not new users registering.)

There are other promotional angles I would like to discuss but this post is getting too long.

Simply put, promote nosebleeds and more players will want to play them.

No comments: