Daily Fantasy Bankroll Management: An Overview
This article has been a long time in the making, mostly because I keep changing my mind on how to approach the subject. DFS is a strange animal when it comes to bankroll management. This is because we have the option to enter the same team into multiple contests, making the results of our different contests not independent of each other. When you enter 10 poker tournaments at the same time, your results should be independent of each other. When you get pocket aces at one table, you could get seven duce at another. If you enter the same fantasy team into ten different contests, (HU, double ups, GPPs, etc.. 1) and Mike Trout strikes out in one of your heads up matches, he also strikes out in the rest of your contests. Playing different opponents adds variance to your results, but your team will put up one number and your opponents will have to fall on either side of it.
For poker, bankroll management is usually talked about in terms of “buy-ins” . For example, if you have a $10,000 bankroll and are looking to play in a $200 tournament you would have 50 buy-ins for that specific tournament. But this won’t work for DFS. Let’s say you have the same bankroll and are looking to play in a $200 contest. If you play in just that contest with that team, you can follow the poker guidelines. But when you enter that same team, or a very similar team into another contest you create a scenario that requires a different measure of bankroll management than the “buy-in” method.
What I suggest is a method that looks at your total amount risked on any given night in relation to your overall capital or “bankroll”. To establish a base number to work off of, let’s say you enter a few similar teams into HU matches, double ups, and GPPs. HU and double ups require the smallest bankroll to play, as top players reach the money 55+% of the time. GPPs require a bigger bankroll as the payouts are top heavy and top players usually only cash 15-20% of the time. If a top player was to play one HU match a day with a 56% win rate(~7%ROI) the Kelly Criterion bankroll guidelines say he should have between 18-20 buy ins. Double ups we will assume as heads up matches, as the pay outs are the same. For GPPs, the same 7% ROI player needs closer to 100-150 buy ins, as he is reaching the money less frequently, and has to rely on infrequent big scores to balance out or overcome loses.
So to determine how much you should be wagering in a given night you have to look at how diversified your team is and what type of contests you are entering. If I am entering very similar teams into contests across sites I follow this table of guidelines.
Daily Fantasy Bankroll Management: Exceptions
A note on the 100% GPP scenario. A lot of times, especially on DK, there are situations where the big tournaments have a lot of overlay. In these situations your ROI becomes higher due to the extra money in the prizepool, and therefore you can use a higher % of your bankroll and enter more teams. I know this all sounds conservative, but when it comes to bankroll management it is ALWAYS better to air on the side of caution. The worst thing a winning player could do is jeopardize his future earnings by being too aggressive at the beginning of a season and losing his bankroll due to a streak of bad luck.
The other exception I have found would be for those who play football. The short season forces those who derive most of their winnings from football to be a little more aggressive with their bankroll to maximize profit opportunities. If I specialized in football (and I was a winning player) I would risk 10% each week with a 50-50 GPP/HU breakdown.
Daily Fantasy Bankroll Management: Important Note
And that brings up the last, but most important, point. To apply these strategies properly, one must be a WINNING player. There is no bankroll management strategy that will make a losing player a winning player besides “don’t play”. But for everyone out there who plays strictly recreationally I would pick the amount I put in play every night based on what I feel comfortable losing, and an amount that, if lost, wouldn’t put stress on my other finances.
1 HU = Heads Up aka Head-to-Head
1 Double Ups = Same as or similar to 50/50
1 GPP = Guaranteed PrizePool