Although perhaps not as pertinent an issue as it once was – especially with the entire dynamic on sports betting likely to change dramatically within a matter of weeks — daily fantasy sports has previously gone through considerable effort to steer clear of a gambling designation. In fact, the ability of the industry’s lobbyists to convincingly establish a distinction between the two has been key to getting DFS expressly legalized in 18 states and counting.
Single-game DFS contests have pros and cons
One real-money gaming activity that DFS draws frequent comparisons to is sports betting. That’s not surprising, as there’s unquestionably overlap.
Serious DFS players and sports bettors utilize many of the same metrics in their research. Some DFS formats (i.e. Boom Fantasy) are essentially based on individual player props. And, within the last few months, single-game DFS contests have been rolled out on both DraftKings and FanDuel. This format is the closest salary cap-based DFS has come to emulating conventional single-game sports betting.
Early on, there was trepidation expressed by some industry observers regarding these contests. Most of the concern seemed to be primarily centered on any potential legal issues that could arise. After all, language in the UIGEA (Unlawful Internet Gambling Enforcement Act) establishes that winning outcomes in paid-entry fantasy contests are supposed to be based on “multiple real-world sporting or other events”.
However, a problem of a different nature – from the user experience perspective — emerged earlier this week regarding DraftKings’ single-game contest format, Showdown. One high-stakes DFS player, Andrew Wiggins, had this to say about the Showdown GPP (Guaranteed Prize Pool) experience for the NBA postseason:
Not all sports betting elements translate well to DFS
The comments naturally represent just one player’s opinion. Despite these types of hiccups, it’s notable that FanDuel and DraftKings experienced significant success with the single-game contest format early on, and both subsequently expanded it to multiple sports.
However, the fact that there was indeed such a logjam at the top of a tournament brings what may be an inconvenient truth to light. Namely, that despite similarities between the two activities, some of the appealing elements of single-game sports wagering don’t exactly translate to single-game DFS.
Having a significant number of bettors wagering on the outcome of a single sporting event doesn’t cap the return for anyone with a winning ticket. A peer-to-peer contest like DFS held under the same conditions is a completely different animal. Considerable lineup overlap is not only likely, it’s essentially inevitable.
The problem is likely exacerbated during the NBA playoffs, when teams tend to use even tighter player rotations than customary. That drives athlete ownership levels even higher, leading to even more ties up and down the contest leaderboard. And more ties lead to a significant watering down of the prize pool.
- Editor’s note: DraftKings introduced a new variant to its Showdown contests this week called “Captain Mode.” Each team selects captain position, which costs 1.5x the salary but also earns 1.5x points. This format, still in beta phase, is designed to reduce the number of duplicate lineups in Showdown contests.
Ironically, a format like Showdown that pushes DFS closer to sports betting also serves to highlight a key difference between the two for its participants.
Sports betting and DFS set to be more co-mingled than ever
On a related note, DraftKings is apparently ready to make the headfirst jump into sports betting if PASPA is overturned in Murphy vs. NCAA. That much has been made clear by its recent hire of a Head of Sportsbook, as well as CEO Jason Robins’ on-the-record discussions about the company’s sports betting plans.
The strategy underscores how much interest DraftKings feels their DFS customer base already has or will have in sports betting. It’s no stretch to assume that plenty of DFS enthusiasts have long been active bettors as well, and that those who yet aren’t would be easily drawn to at least sample it. That overlap has likely played at least a part in the popularity of Showdown and FanDuel’s own single-game offerings.
Whether single-game salary-cap contests survive the forthcoming advent of sports betting products on the DFS sites is another matter. In time, single-game wagering could potentially render single-game DFS obsolete, considering the two sites projected to develop sportsbooks (FanDuel is expected to eventually follow DraftKings’ lead on this) are also the only two running single-game DFS slates.