Daily Fantasy's Big Events: Rake Analysis
This article examines the big qualifiers to calculate how much rake is effectively paid based on the prize pool offered and other considerations. I will use the DFBC (Fanduel), DSBC (DraftStreet), PFBC (StarStreet), and the BLB (DraftDay) as examples. Let’s use the DFBC to get us started and then apply the same logic to the other events.
- The DFBC Main Event pays out $500,000 in prizes. There are 45 competitors in the event, so the average value of a single entry into this event is $11,111 ($50,000 divided by 45).
- Each qualifying event has an added prize pool of approx. $11,075 in addition to the value of the seat. So each qualifying tournament has a total prize pool of $22,186 ($11,111 plus $11,075).
- The $25 qualifiers usually have a maximum of 1,182 entries. Therefore, Fanduel is charging 25% rake on each qualifier (1-$22,186/$29,550).
- This may seem like a lot, and it is, however, there are other considerations that should be accounted for. First is that the event is a trip. According to FanDuel’s website, “Each finalist will get: one plane ticket to Las Vegas, a limo ride from the airport to the Palazzo Hotel and Casino, two nights in a suite at the Palazzo, Friday night cocktail party with all the other winners, an amazing Saturday night of fantasy baseball at Lagasse’s Stadium.” If we estimate this to be roughly $2,000 in value, then effective rake is reduced to 18%.
- Second is that these qualifiers often have overlay, on some sites more than others. If we attach a 5% overlay to the qualifier, then effective rake is reduced to 14%. Furthermore, satellites to the main qualifier can have overlay too, reducing your rake even further.
Below is a table where I show these calculations for all four big events. The overlay is based on actual data received from recent qualifiers, and the Travel expense has been estimated.
| Item | FanDuel DFBC | DraftStreet DSBC | Starstreet PFBC | DraftDay BLB |
|---|---|---|---|---|
| Qualifier Buy-in | $25 | $215 | $109 | $44 |
| Entries | 1,182 | 60 | 120 | 158 |
| Total | $29,550 | $12,900 | $13,080 | $6,952 |
| Avg. value of seat | $11,111 | $6,000 | $5,000 | $4,719 |
| Runner-up prizes | $11,075 | $6,000 | $2,000 | $1,200 |
| Total | $22,186 | $12,000 | $7,000 | $5,919 |
| Rake on prize pool only | 25% | 7% | 46% | 15% |
| Travel estimates | $2,000 | $- | $2,400 | $- |
| Rake after travel estimates | 18% | 7% | 28% | 15% |
| Estimated overlay | 5% | 0% | 25% | 0% |
| Rake with overlay | 14% | 7% | 4% | 15% |
Travel estimates are not transparent for us to calculate with 100% accuracy. I chose these numbers using knowing that FanDuel’s finals include a flight, a limo, two nights at the Palazzo hotel, a cocktail party, and renting out Legasse Stadium. However both FanDuel and StarStreet’s finals have general organizational costs associated with them beyond what the finalist receives that add to the experience such as flying FanDuel’s employees out, or the cost to rent the Playboy Mansion out. This was all considered when determining
It should be noted that effective rake varies by individual. For example, a family man that lives in LA and can drive to the Mansion probably has a much higher effective rake than a 22 year old single man from New York City. Please use the above numbers as a guide, but it is ultimately up to you to decide how much these events are worth.
DFBC and PFBC Payouts
