Tournament Structures and What DK MUST Do To Help Today's Low Stakes Grinder.
Let me start off by saying I love draftkings. They were my first true DFS love (well, if we don’t count Alphadraft… they only had E-Sports anyways). Their payout structures were amazing (no more than 20% for first, 2x min cash). They had $3 moonshots with 100k+ guaranteed for most of the year (dipped below as the season came to an end). I don’t recall if the small buy in contests were ever 150 entry max (I’ve been playing on DK for awhile but never took it serious enough to notice stuff like this until summer of last year), but for me they’ve at least always been 50 entries. Shortly into 2017’s MLB season, they rolled out a “20 entry limit” for all contests $4 or under and recently they banned the top pros from playing in contests with an entry fee lower than $5. I think there are a few ways to look at this and I don’t see it all as positive or negative. I’m going to attempt to illustrate some of the problems that still exist in the current DFS environment and what both sites could do to fix them.
I guess I should back this up a bit (IF YOU DON’T WANT TO READ A BIOGRAPHY SKIP THIS PARAGRAPH).
Let me introduce myself. I’m DSofM. I live in Canada and my dream growing up was/is (I’m not really sure right now) to be a professional poker player. I was pretty serious about it too, it’s even written in my grade 8 yearbook (maybe my dad wasn’t the best role model). So when I was of legal age (which luckily in Canada comes two years quicker than in our neighbours to the south), I began my quest. I mean, I had practiced and played online already but I never got too serious with it financially because I was worried about losing any money I did make and felt the time invested wouldn’t have really been worth it if I had it all taken away once I had to confirm my identity. I grinded online small stakes but didn’t make it too high up the ladder. I peaked as a winning player in 50 NL before I found I more lucrative option; playing live poker. People had already been saying for years that online poker was dead (I mostly agree with this stance now, at least for cash games). But playing live is still very much alive and well. The only challenge with starting out with live poker is having the bankroll for it and being comfortable winning/losing hundreds of dollars (woah, big shot!). Over my first summer of transitioning to a “live pro” I had a win rate of $22.80/hr and I honestly don’t think the games I played in were that great (based on location/availability/things I’d heard about other places). Now how does any of this tie into DraftKings? Excellent question (oh crap, am I talking to myself right now?).
In poker, there is a clear path to your dreams. Sure, it’s difficult as hell, and 99% of the players never make it to the very top (I think that’s true in pretty much everything), but many players can be profitable at various stakes. The journey is simple in poker. You start at the very bottom (1c2c cash games, or 10c/25c tournaments) and grind your bankroll up. You play against players that are around your approximate skill level until you are significantly better than them (at which point your bankroll will have grown significantly) and you can move on to higher stakes. This is a rinse and repeat process, and time invested generally equates to noticeable results once you have a significant sample size. The problem with DFS is that this isn’t how low stakes players build their bankroll, and it creates an even steeper slope for anyone trying to beat the game long term. From the moment I started playing DFS, at the very lowest of stakes, I was playing against the Michael Jordan of DFS. I didn’t realize it at first, but I was. That problem has been reduced with the new changes to ban all players with over a million dollars in earnings from playing in low stakes games, but that doesn’t mean that there isn’t a bunch of solid pros still lurking in these games while also playing high dollar buyins. The primary difference between DFS and poker is that the player doesn’t have to “play” the games. All they have to do is build lineups and enter them into contests. Why wouldn’t a high stakes pro increase his ROI by a few % points by clicking his lineups into the low stakes stuff? I’m not condemning them for doing it, the rules weren’t well thought out from the start and the pros who did this really didn’t do anything wrong. I think the site has an obligation to protect newer players and low stakes players though, and I believe DraftKings is starting to agree with this. I still think they could make it better though. Besides the pro’s in the micro stakes, there are TWO major issues that need to be addressed: #1 is the tournament structures and #2 is the inability to climb stakes in tournaments because of how they are currently structured.
So we’ve identified some of the problems, how are we going to fix them? One of the biggest offenders is the tournament structures, and the payout structures that come with them. I will start by saying that I have a theory about why the payout structures are this way, and I’m sure people will say something like “well if you were good you could just beat the games anyways”, and sure, that may be true. The main problem is that the structure creates a lot of people stuck in the middle and doesn’t reward people for cashing OR binking a tournament like it should, given the difficulty to achieve these feats. I’m going to use the 7.5k Solo Shot from August 11th as my point of reference. It is an 8823 player contest (so we’re already shaving $1300, or 15%, off the top, more on that later). This contest pays a measly $500 to first (or 6.66%), and has 1139 players min cashing for 1.5x ($1.50) which equates to $1708.5 in min cashes (approx 20% of the payout). So now you have 75% of the entrants getting no money, and the next 13% getting min cashes, which basically means 88% of the people in the tournament have come up empty, since a 1.5x min cash is pretty abysmal and you’d have to sustain a ridiculous win rate to profit on 1.5x min cashes with 15% rake. Then we have even bigger problems at the top of the ladder. A 6.66% payout for first is simply not enough. I think it needs to be minimum 10%, and then with flatter payouts and fewer min cashes. I took a screenshot of a recent PokerStars lobby that had a $7500 (technically slightly more) prize pool and here’s what the payouts look like. In my ideal world, these aren’t quite perfect either, but it’s a lot more rewarding to cash and a lot more rewarding to finish at the top, though some of the finishes between place 50-100 become slightly less lucrative. Here’s a direct comparison between the Stars payout structure and the DK payout structure for a contest with the same prize pool. A few notable differences would be that on Stars you’re only being raked 10% as well, and you’re sacrificing a bit of the middle ground to have a better reward for min cashing and a better reward for finishing near the top.
So I’m not going to say the Stars payout structure is the best possible solution, but I think it’s better. A slightly less top heavy tournament that was slightly more rewarding to spots 20-100 would probably be my ideal setup. I think that the way that tournaments on DK are set up now are basically structured to create a lot of marginal winners or losers. A few people will break through but with 15% rake and a 1.5x min cash I think the majority of us are going to be stuck in the mud until DK manages to rake us to death. I hope I’m wrong about that, by the way, but when I really look at the numbers there it seems kind of grim.
Here’s what DraftKings needs to know about low stakes MME players, and what they need to change to facilitate healthy growth from micro stakes to medium stakes:
I think that me and my fellow low stakes MME’rs are a little misunderstood. We don’t hate 50 entries. We don’t even hate 150 entries. We hate playing for very small buyins against the best players in the world. This has been fixed somewhat, with the new limits put in place, but pros can still enter the $4 Four Seamer, which is kind of the bread and butter tourney for a low stakes grinder to get a reasonable size prize pool. If DK ever wants players to grow and challenge the pros at higher stakes and pay higher raked BI games, they need to help us out a bit. Let me paint a bit of a picture for you.
Right now the $4 20 max is the lowest MME tourney before you get to the $8 rally cap. So logically, you would grind your BR up until you had enough buyins to play the $8 rally cap from entering the $4 tourney and the smaller ones as well (even though currently they all kind of suck, more on that later). Ok, seems simple enough, so what’s the issue? Let’s say you’re a reasonable person and you want to risk 2% of your BR on tournaments each night (probably nitty for other sports, but understandable for MLB). So if you want to only play 2% of your roll in a $4 20 max ($80 total), you’d need a bankroll of around $4000 to enter in everyday and have a very low ROR (risk of ruin). Now, I think I’m a successful winner in the $4 games and I want to move on to the next level up. How much am I going to need to acquire to have a reasonable bankroll for that game? Well, it’s double the buyin ($8), but it’s also 7.5x the amount of entries (150!) [side note: I firmly believe if you aren’t MMEing a GPP you’re dead in the water so I’m operating under the assumption that you MUST enter the maximum amount of entries in each tournament possible (or 2x the maximum if you have a good brother). Ok, so 150×8 = $1200… per day. But I only want to play 2% of my roll, so I need to 1200×50 which is… $60,000. So in order to climb just ONE level in stakes I need my bankroll to go from $4,000 to $60,000 when the highest stake GPP I play will only offer, on an insanely good day, a $10,000 first prize and 95% of the time it’s half that at best. How can I possibly climb? Seriously, I beg anybody that reads this to explain how I can jump those stakes in a reasonable way. Until DK makes a change here there really is no point in having aspirations to do this professionaly unless you already have a $60,000 roll or plan to be the luckiest human alive.
So, how do we fix this? Honestly, this is a tough one for me. I think we need to have more entries available and higher prize pools offered at the 25c, 50c, $1 and $2 levels and have the big named pros banned from $2 or cheaper contests, no matter how big the prize pool is. I realize these tournaments prize pools have dropped in guarantees quite a bit recently and I think that could be revived if they allowed higher entries into them. One of the reasons they’re seeing fewer entries is the horrible prize structure and small guarantees. Does it appeal to a casual player to play a 25c tournament with a $100 first prize? Of course it doesn’t. What they need to do is make the 25c and 50c tournaments higher variance top heavy tourneys. On the day that I’m writing this section, a typical slower day for MLB due to 2 slates, they filled 4 quarter arcades (a 1k gtd, 500 gtd and two 300 gtds.) So this could’ve easily been a 2k guaranteed quarter arcade instead of a bunch of crappy ones with small prizes. Make the 25c tourney a 3k guarantee with $500 for first. People will fill this contest. Who doesn’t want to throw in a quarter for a shot at $500? That’s the appeal to the casual player. Make the 50c tourney a 4k guarantee with $800 to first. Make them both 50 entries. On a similar note they filled 5 solo shots today (5k gtd, 1.5k gtd, 750 gtd 500 gtd and 100 gtd). Those contests made up 9233 entries for some pretty dull tournies. If you had a 15k-20k gtd $1 solo shot with 150 max entries I think you could fill it and get people excited. Balance out the pay structure a bit more in this tourney (10%-15% first place, 2x min cash, less spots paid than our current structure). The $2 contest can still remain a 20 max (or maybe even just a 10 max), make it more of a niche for someone that wants to play low stakes but doesn’t want to slam in 150 lineups to think they have to compete. Next up is the $3, $4, $5, whatever amount this ends up being next year. It NEEDS to be 50 max MINIMUM. Let the sharks back in, give everyone 50 entries and give us some 150-200k guarantees. We need a way to bridge the gap between the $4 and $8 stakes, and this would help significantly.
In closing, I do firmly believe that DK thinks they have the best interests of the casual player in their heart, and they’ve given us some reasons to believe this is the case (they’ve added more micro stakes tournies, they’ve attempted to keep the best pro’s out of the smallest games). But in doing so, they’ve effectively killed the dream of climbing up the stakes in DFS in 2017. I believe they need to change their mindset on “protecting” lower level players via limited entry and instead restrict ALL players with a very high amount of winnings from playing ANY buyin that is $2 or less and then increasing the entry limits in those stakes to allow more low stakes grinders an opportunity to compete at MMEing with players of their skill level while also making the contests big enough, fun enough and not tough enough for a casual player to feel comfortable entering in. Thanks for reading this, I hope that at the very least this creates discussion. I hope that the people in my position are vocal if they share my opinions and I hope that we can create a healthier tournament structure as NBA approaches or even potentially just for next year’s MLB.
p.s. I wrote this over a couple weeks and so some of the days that are referred to as “today” will not actually be the same day as the day the blog is posted.