Thursday, August 30, 2012

Too Many Sites, Not Enough Traffic

And so it has begun.

As it approaches six years of existence, I call this "stage 2" of the daily fantasy sports industry.

There are now well over a dozen live contest sites (maybe even 20 if there's a few I haven't spotted yet).

In this very moment, all of the sites are vying for your dollar just before the start of the NFL season. This is the Black Friday of DFS.

There are plenty of deposit bonuses, freerolls and contest promotions. Play against your favorite fantasy expert or fantasy hottie. (I maintain that none of the experts are good looking and none of the hotties are experts.)

Fan Duel even got mentioned on Deadspin for doing a Jim Rome rip off in one of its commercials.

At first glance, it seems all of this competition is great for the player, and to some extent that's true. If you're just starting out and trying to build bankroll, you can bonus whore a little bit.

What is disappointing (from my point of view) is that the traffic simply cannot support all of the sites at this time.

Why does this suck?

Simply stated, it forces the tournament prize pools down. Sites will roll out a big tourney and if it doesn't fill they adjust the tourney size downwards.

I suppose if you are strictly a heads-up player, this would mean little to you. However, there is so much dead money in the large fields, any decent player would be foolish not to invest in them.

One really great development of this fierce competition is the lowering of rake. Fantasy Sports Live just announced that all of its HU games are now down to 5%. I would be all over that.

So what's "stage 3" of the DFS industry?

There's going to be eventual consolidation. Some of the sites will be bought out. Some will go under. Players will be pissed they lost money with a failing site.

But hopefully traffic will grow steadily so when the consolidation occurs, there will be bigger prize pools for the player.


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