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  • mambaland

    https://www.forbes.com/sites/darrenheitner/2018/02/14/former-investment-darlings-draftkings-and-fanduel-are-struggling-to-grow/#575f34b6269e

  • TeamTwerk

    The entire rake system in DFS has never made sense to me. They’re fixated on this sports betting idea that you need to take a fixed percentage more or less regardless of the stakes. DFS is much more like poker than sports betting. The sites are simply hosting people playing against each other like poker. In poker rake at the highest stakes are maybe $2 a hand more than stakes 100x smaller. In DFS why should the exact same product and hosting cost $.05 for the quarter arcade player but cost in some cases hundreds for higher stakes? It’s especially true for h2h games. This doesn’t really impact me as I don’t play high or even much medium stakes but it’s just something I’ve noticed that seems strange. Maybe this is partially why the best players end up playing so much in the smaller buy in contests.

  • RangerC

    The article says DK isn’t operationally profitable, which should shock no one… remember this is the company that spent millions to become a Liverpool partner and have their ads on Anfield sideboards (haven’t seen them this season, maybe they aren’t burning $$ here any more), while keeping their EPL games small enough that they filled an hour before kickoff at times (wouldn’t want to possibly have a couple hundred in overlay). I’ve posted multiple threads on how they completely killed EURO golf (and have repeatedly damaged their PGA product) for no reason; they are just not a well-run company in any way and it’s sad that they either purchased or ran out multiple better providers (DraftStreet, Victiv/Starsdraft, and Fantasy Feud come to mind). I wonder how many millions were spent on garbage like team partnerships and the worst ad campaigns of all time instead of organically growing a business through offering good, low rake games where average players feel like they have a chance to win.

  • kdjac0434

    @pointsmuncher said...

    I’m just a casual player that started in 2014 and played about $25 a weekend during NFL. If I won some I would carry it over to NBA and then to MLB as each season ended. I haven’t played for about 6 months now at all. The money was irrelevant honestly, I make enough that $25 here and there just bought enough chips to play the games and not feel any stress about it. I really think I’m about as average a player as it gets. Just wanted to chip my thoughts in on this because I read the article on Yahoo and wondered what the feedback would be on this website (I used to read it religiously trying to find an edge) and how people were viewing the industry as a whole. I stopped playing because it got too frustrating to immediately count a lineup out if it wasn’t perfect for the week. Taking a loss is probably easier if you are running 100 lineups or 25 lineups but with 1 lineup it sucks. Then would come back here on Monday morning and the feedback would just be ‘make better lineups’. I get it, I really do, but I can’t make a perfect lineup. That doesn’t take skill, it just takes a ton of luck and maybe enough entries to give yourself a fighting chance. All the reasons the pros on these forums are laughing in your heads as you read ‘this idiot expected to win a million dollars with 1 lineup in the Sunday Million’ are the reasons the target audience is tapped out and isn’t coming back after watching the ads and giving it a shot. This isn’t a casual hobby anymore, just being on here proves that. Maybe in 2014 when you could still make a mistake in a lineup and manage to compete for a nice prize anyway. Regardless of the emails I get from DK and FanDuel with special offers or bonuses. I can’t beat the games. And I’m fairly intelligent and love sports. Its a shark filled world and the little guy gets eaten alive. But there are no little guys out there who dream of being sharks that haven’t already given it a shot and failed. The ecosystem left will eat away at each other’s profits long-term while the sites skim high rake until about 2020-2021.

    I think this spot on, but only part of it. The real problem is the “edge” is so small. Most people playing know who the small pool of players are each night. Its not about the perfect lineup so to speak, its getting lucky enough to avoid the dud.

    A few years ago the Russell Westbrooks, Clayton Kershaws, Leveon Bells and so forth were at most 30% owned in cash games. Now they are 75 to 90% owned. Everyone has the “edge”. To win you have to pick the right players from a very small pool of “good” plays for the given night.

    A few years ago guys picked the players they liked or were in the games they planned on watching that night. That doesn’t happen anymore. There really isn’t a casual DFS player. 95% of the of the players have access and use “experts or touts” And even if the information they give isn’t spot on, its good enough to be a reasonable play for that day.

    There is no thinking for one-selves in DFS today. And maybe there shouldn’t be. If pricing was super tight there would be a debate on who to play on which day. But if it is loose, you play Westbrook, Kershaw or Bell on the day he is playing, because those guys give you the points.

    I don’t doubt that there is skill to win, but the distance between skill and luck is so close its not measurable anymore. If you can select the right player pool (and any tout, expert, site, pay info . . .whatever, gives you a reasonable one) its just a matter of getting lucky with the combo what gets the most points to win.

  • mike291md

    Another issue — lack of transparency. And what’s mind boggling is since the Ethan scenario happened several years ago, transparency has only gotten worse.

    We have no access to basic information on players. Most of the time, you look a username up and it can’t be found or it has no history. I play GPP’s every single day, I see unrecognizable names in the top 10 essentially every day. Several years ago, you would have recognizable names like Ganondorf or whatever. Remember Condia? These guys just stopped playing? Now it’s names like Manziel2122, Leo303, and you have no clue the playing history behind these names because they can’t be found in a database. Mind you I’m on small-stakes tourneys.

    You see a username with multiple 0.3% plays who just happens to go off and, on top of that, he miraculously NAILS the rest of his/her lineup too. You’re telling me different usernames every night are NAILING ridiculous plays. I don’t know man, it’s hard to believe. And it’s constantly a username you’ve never seen before. Then you look up said username and you see nothing what-so-ever behind it.

    The real point is that we should have access to info on usernames to at least prove they are actual players. The second you sign up on a website you should have to agree to have your playing history tracked so we can at least prove you’re a frigging real person. Otherwise, who knows what the heck is going on? Is it really beyond the realm of belief that a dummy lineup can be created and manipulated by a computer program as the games go on? All we have is hope that everything is on the up and up. That’s it.

  • Taterchipdip

    Forbes published this article on Valentines day, a very slow news day. Whenever I have seen Jason Robins interviewed hes always positive and saying how he is looking forward to expand Draft KIngs in other countries. Keep in mind DK has only been around since 2012, they still have big growth potential.

  • Jagwarr

    • 2016 FanDuel NFL Playboy Mansion Finalist

    I went back to Yahoo last week and I’m glad I did. It’s difficult to explain but I read the news every morning and these days I find that FoxNews and CNN have such different takes on stories that I have to also look at BBC to try and find a middle ground.

    Yahoo fantasy daily is kinda like the BBC to me, the middle ground. They run basic contests with even payouts and lower rake. It’s not an amusement park but it is exactly what many might be looking for.

  • GizmoMoney

    Mayorga

  • noddy

    @FantasyDraftSupport said...

    lol

  • giantsfan12345

    You guys find a way to complain about everything. Success takes hard work.

  • Malorum

    The edge was always going to continue to become smaller and smaller as data becomes more readily available across the board. It this digital age that was only inevitable. Not much can be done about that. My biggest problem is with the payout structures of some of these contests. They are too top heavy where the top 10 take over a quarter and sometimes up to 40% of the total prize pool. We need more contests with a flatter payout structure that rewards players that want to grind the contests rather than hail mary the top heavy ones. A classic example are these 100K for first contests that DK has been running for NBA. Too many $20 contests and too few $5 contests. They always lean towards the heavier entry fees. That has to stop if they want to keep more of the casual players around.

  • Shadetree42

    @TeamTwerk said...

    The entire rake system in DFS has never made sense to me. They’re fixated on this sports betting idea that you need to take a fixed percentage more or less regardless of the stakes. DFS is much more like poker than sports betting. The sites are simply hosting people playing against each other like poker. In poker rake at the highest stakes are maybe $2 a hand more than stakes 100x smaller. In DFS why should the exact same product and hosting cost $.05 for the quarter arcade player but cost in some cases hundreds for higher stakes? It’s especially true for h2h games. This doesn’t really impact me as I don’t play high or even much medium stakes but it’s just something I’ve noticed that seems strange. Maybe this is partially why the best players end up playing so much in the smaller buy in contests.

    Exactly. If you’re old enough to have lived through the online poker boom/bust, it’s eerily similar. Sharks had to go to the small tables and play 10 games at once to churn out the maximum (if mind-numbingly dull) profit. Then the dumb players started to disappear. The banking law in 2006 was the final straw.

    There is no way DFS won’t go in a similar direction. If I owned a site, I might think about getting ahead of it, and trying to develop shark vs. shark high stakes contests — with realistic player pricing that forced people to pick unique teams. Just a thought.

  • Shadetree42

    @rachelkyle said...

    I think this spot on, but only part of it. The real problem is the “edge” is so small. Most people playing know who the small pool of players are each night. Its not about the perfect lineup so to speak, its getting lucky enough to avoid the dud.

    A few years ago the Russell Westbrooks, Clayton Kershaws, Leveon Bells and so forth were at most 30% owned in cash games. Now they are 75 to 90% owned. Everyone has the “edge”. To win you have to pick the right players from a very small pool of “good” plays for the given night.

    A few years ago guys picked the players they liked or were in the games they planned on watching that night. That doesn’t happen anymore. There really isn’t a casual DFS player. 95% of the of the players have access and use “experts or touts” And even if the information they give isn’t spot on, its good enough to be a reasonable play for that day.

    There is no thinking for one-selves in DFS today. And maybe there shouldn’t be. If pricing was super tight there would be a debate on who to play on which day. But if it is loose, you play Westbrook, Kershaw or Bell on the day he is playing, because those guys give you the points.

    I don’t doubt that there is skill to win, but the distance between skill and luck is so close its not measurable anymore. If you can select the right player pool (and any tout, expert, site, pay info . . .whatever, gives you a reasonable one) its just a matter of getting lucky with the combo what gets the most points to win.

    These sites are delusional if they think that loose pricing is going to lure more sheep. Anyone who is remotely interested in DFS has already tried it. Tighter pricing, while reducing user numbers, is likely to increase volume long term, IMO.

  • Lathum

    @mrmoz55 said...

    You guys find a way to complain about everything. Success takes hard work.

    This is an amazingly naive and short sighted take.

    I have often said in these discussions I want to know what % of customers redeposit, and that it is likely a small amount. I used to work in insurance, and the amount of policies sold isn’t really an important number, its the number of polices retained. You have to keep the same customers coming back, and to do that you have to at least give them the perception the game is beatable.

    When you have sharks, lineup sellers, lineup trains, etc…then throw in the late scratches and nonsensical things like roof leaks and the shitty way the sites handled it, it’s not hard to see that the new/ average player would take their money elsewhere.

    Everyone wants to win the big one, but a huge number of DFS players are doing it for entertainment, and when they blow through those entertainment dollars without actually having any fun, they will take those dollars elsewhere. Not redeposit and put in more work.

    Anyone who thinks these sites are too big to fail, and that there is too much money didn’t experience black Friday in online poker. You know the last time I won a tournament on pokerstars? 2011.

  • jjwd

    @Lathum said...

    Anyone who thinks these sites are too big to fail, and that there is too much money didn’t experience black Friday in online poker.

    That was a legal/bank issue with poker… which DFS doesn’t have.

  • jjwd

    @Shadetree42 said...

    These sites are delusional if they think that loose pricing is going to lure more sheep. Anyone who is remotely interested in DFS has already tried it.

    Not sure this makes sense to me… new people turn 18 every day. Overall, these threads always turn too dark imo. People got screwed with online poker, i understand that. But I think people get too negative with DFS issues. It’s easy to complain, there are a lot of things to complain about, but this attitude can sometimes hamper any potential brainstorming. The tight pricing solution is interesting to me, I wish there were more discussion about that.

  • RangerC

    @Shadetree42 said...

    These sites are delusional if they think that loose pricing is going to lure more sheep. Anyone who is remotely interested in DFS has already tried it. Tighter pricing, while reducing user numbers, is likely to increase volume long term, IMO.

    PGA tournaments were actually bigger under the old pricing model (before they moved the floor up and chronically mispriced 3-10 top players every tournament). Being able to play Cabrera-Bello at 400 off the salary floor might make it easier for a first time player to make a LU they like, but when they don’t cash because RCB is 35% owned and everyone is on the same 50 golfers, they aren’t going to come back to the game.

  • mambaland

    @mike291md said...

    2) Actively pursue and prevent lineup buying (cheating)
    When you see the same exact lineups under multiple screen names finish with the exact same lineup combination, this should draw a red flag to the site. Monitor said screen names going forward to ensure this isn’t happening more than once. Heck, maybe it was a coincidence, but you can’t assume that. Also, all it takes is a quick scan of the internet to find these sites and twitter accounts that sell lineups. You need to start threatening action to prevent this from ongoing. If it’s obvious to a casual player, it should also be obvious to the website.

    its the sharks or pro guys all running same lineups have been for years..not the random guys who join the site

  • mambaland

    i would still enter the gpp events BUT when i see guys with 40 to 100 entries i just know my 1-5 lineups will have no shot then why even bother…i am surprised they even allow h2h and 50/50 anymore…however they are all shark filled now too

    i am shocked they still get investors what are they getting in return for investments?

  • MickyD10970

    • 839

      RG Overall Ranking

    @Lathum said...

    This is an amazingly naive and short sighted take.

    I have often said in these discussions I want to know what % of customers redeposit, and that it is likely a small amount. I used to work in insurance, and the amount of policies sold isn’t really an important number, its the number of polices retained. You have to keep the same customers coming back, and to do that you have to at least give them the perception the game is beatable.

    When you have sharks, lineup sellers, lineup trains, etc…then throw in the late scratches and nonsensical things like roof leaks and the shitty way the sites handled it, it’s not hard to see that the new/ average player would take their money elsewhere.

    Everyone wants to win the big one, but a huge number of DFS players are doing it for entertainment, and when they blow through those entertainment dollars without actually having any fun, they will take those dollars elsewhere. Not redeposit and put in more work.

    Anyone who thinks these sites are too big to fail, and that there is too much money didn’t experience black Friday in online poker. You know the last time I won a tournament on pokerstars? 2011.

    Well stated Lathum. You nailed it on the head. I pulled all my money from Fanduel and DraftKings for exactly that reason. I wasn’t having fun anymore. The excuses got old, nothing ever changes and I am a guy that’s been around since the earliest stages of DFS.

  • Lathum

    @jjwd said...

    That was a legal/bank issue with poker… which DFS doesn’t have.

    You don’t think DFS had/ has legal issues?

    They almost went broke trying to get legalized, now are cash poor, and still have uphill battles in several states.

    Not to mention they are flying way to close to the sun with single game slates, etc…

  • divusjulius

    • Blogger of the Month

    I think it’s important to separate the objectively negative policies of the sites like the rake, the top heavy payout structure, and the lack of game protection and transparency from subjective matters of personal taste ( i don’t like MME so that is what is ruining dfs etc).

    The rake and payout structure are daggers to growth and retention. too much money removed from the pool, and the remainder of the prize pool steered to the top 5% or less of each GPP equals a dying ecosystem. then go on to really create a toxic environment for retention/new players by adding idiosyncratic game protection, completely vague TOS and protection rules (remember that disaster of DK trying to explain why it didn’t enforce its own collision regulations in MLB 2017?) and zero transparency about their decisions.

  • Lathum

    @jjwd said...

    Not sure this makes sense to me… new people turn 18 every day. Overall, these threads always turn too dark imo. People got screwed with online poker, i understand that. But I think people get too negative with DFS issues. It’s easy to complain, there are a lot of things to complain about, but this attitude can sometimes hamper any potential brainstorming. The tight pricing solution is interesting to me, I wish there were more discussion about that.

    Did you read the article?

    It cites the study and indicates people turning 18 are a small portion of new users.

    Do you really think there is an army of kids turning 18 waiting to deposit their life savings into dfs?

    How much extra money did you have when you were 18? I was lucky to pay my car insurance let alone have money for DFS, and if I did have extra money it was going to a six pack of Bud Ice.

    The concept that new flocks of 18 year olds could inject new blood to the industry is flawed.

    A quick google search turned up for 2017 roughly 3.8 million kids will turn 18. Lets say for argument most 18 year old girls aren’t playing DFS. That leaves us with 1.9 million boys. Roughly 5205/ day. I would say a high estimate is 1% of them actively want to try DFS when they turn 18. So that is 52/ day, of 364/ week. Now lets say those 364 kids start with an average deposit of $25, thats a good round number. Thats $9100/ week of new deposits, spread out between sites. That isn’t even remotely close to enough growth. Hell, if 5% of 18 year olds deposited, a completely unrealistic number, it is still only 45K. Then factor in the 85% churn from the article and you lose most of them anyway.

    The reality is the industry needs to find a way to keep current players plays and new players willing to deposit multiple times. Someone will eventually crack the code, but I’m not sure it will be FD or DK, and I really hope there is some regulation out there making sure those sites have enough $ in reserve to pay out every dollar in peoples accounts. IF one of these sites was to go belly up and not have the cash to pay out players it would be instant death for the industry.

  • LinkSinc

    This is pure speculation on my part, and I hope it’s not too off topic; but I’d be willing to guess that DK is quietly positioning itself for the possibility of sports betting being legal in multiple states soon. They have already announced they are moving to a larger office next year and almost doubling the number of employees. In my opinion, the current trajectory of the DFS industry doesn’t justify that. I’ve even noticed their slogans and marketing I’ve seen recently have shifted away from “fantasy” and more toward “sports entertainment”.

    If that were to happen, they would already be positioned to be a major player in what would be potentially a HUGE market (it might even dwarf the current DFS industry). They already have the partnerships and brand recognition set up better than almost any new company would in that market. They’d never admit it, but I don’t think they see their future as a Daily Fantasy company but more as a betting one if the pieces fall into place.

  • divusjulius

    • Blogger of the Month

    i’ve been a heavy MLB player for the past few seasons, and i still find DFS great fun, but this year the current rake may keep me from playing. very seriously trying to decide if its not a better investment for my time and money to just do MLB sports betting. its starting to look like the margin on most money lines is smaller than the rake in dfs

  • mike291md

    @divusjulius said...

    The rake and payout structure are daggers to growth and retention. too much money removed from the pool, and the remainder of the prize pool steered to the top 5% or less of each GPP equals a dying ecosystem. then go on to really create a toxic environment for retention/new players by adding idiosyncratic game protection, completely vague TOS and protection rules (remember that disaster of DK trying to explain why it didn’t enforce its own collision regulations in MLB 2017?) and zero transparency about their decisions.

    Completely agree. The payout structures have been in need of readjustment for a long time. Personally, the nightly need of a perfect to near-perfect lineup to make any decent money becomes exhausting. I keep playing because I just play small-stakes and enjoy playing. But how many people got fed up of having to be perfect every night? I’m sure a bunch and they’ve likely quit playing already.

    They need to find a way to stretch it out where you can have a very good lineup and make a decent return. It’s far too cutthroat. One mistake and you can kiss any decent money goodbye. Then, you add the rake into it, and you’re really just fighting a losing battle.

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