1 MONTH SUBSCRIPTION (FULL ACCESS)
What is Daily Fantasy Sports?
Daily fantasy sports (DFS) are a subset of fantasy sport games. As with traditional fantasy sports games, players compete against others by building a team of professional athletes from a particular league or competition, and earn points based on the actual statistical performance of the players in real-world competitions. Daily fantasy sports are an accelerated variant of traditional fantasy sports that are conducted over short-term periods, such as a week or single day of competition, as opposed to those that are played across an entire season. Daily fantasy sports are structured in the form of competitions (typically referred to as a “contest”); users pay an entry fee in order to participate, and build a team of players in a certain sport while complying with a salary cap. Depending on their overall performance, players may win a share of a pre-determined pot. Entry fees help fund prizes, while a portion of the entry fee goes to the provider as rake-off revenue.
In the United States, the daily fantasy sports industry is dominated by two competing services; the New York-based FanDuel, and the Boston-based DraftKings. Both companies were established as venture capital-backed startup companies, received funding from investment firms, sports broadcasters, leagues, and team owners, and became known for the aggressive marketing of their services. As of September 2015, both companies have an estimated value of at least $1 billion in the United States, and control 95% of the DFS market there. The two primarily compete against smaller DFS services, such as Fantasy Aces and Yahoo! Sports. The popularity of the daily fantasy format has been credited to its convenience in comparison to season-length games, as well as the focus on major cash prizes in the promotion of these services. Daily fantasy has also been credited with helping to improve television viewership and engagement with sports.
Daily fantasy sports have faced notable legal challenges in the United States, such as most prominently, discussion over whether they constitute gambling. It has been argued that due to their format, players are essentially making proposition wagers on the varying performance of individual athletes in specific games, and not managing the performance of their selections on a week-to-week basis. Proponents have defended DFS as being a game of skill, as the required familiarity with the players and teams, as well as salary cap management, reward more skilled players.
There are several main disciplines of daily fantasy sports competitions, divided into two categories: cash games, and guaranteed prize pool (GPP). DFS contests typically utilize a salary cap format, in which players are allotted a maximum budget to spend on athletes for their team, represented as either play money or points. Each athlete has their own cost, with elite athletes having the highest costs.
In “Double-up” or “50/50” cash game competitions, the object is to finish with a point total within the top 50% of all participants; players who finish in the top half of the field all share an equal prize that is equal to double the entry fee, while the remainder lose their entry fee. Head-to-head competitions are similar, except that players choose an opponent they must beat to win the prize. Guaranteed prize pool contests have higher stakes, using tiered payouts based on finishing in different percentiles or positions of the field of contestants.
Further variations of double-up games, including Triple-up, Quadruple-up, and Quintuple-up, may also be offered. Daily fantasy games exist in a variety of major sports, depending on service, including but not limited to American football (including college football and the NFL), association football (soccer), auto racing, baseball, basketball, cricket, golf, hockey, rugby league and rugby union. Daily fantasy contests have also been held in professional e-sports competitions, such as League of Legends.