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Patterns of Daily Fantasy Sport Play: Tackling the Issues

Abstract

Daily fantasy sports (DFS), a rapidly growing industry, allows players to create fantasy teams of real-life players and potentially win cash prizes, derived from entry fees. Some stakeholders have expressed concern that DFS’s accelerated nature and other features might promote excessive play and related harm. We conducted the first descriptive summary of actual DFS play using records from a cohort of subscribers to a dominant operator, DraftKings. Participants (N = 10,385) initially entered paid National Football League (NFL) contests. Across all participants, players entered a median of two contests per entry day and typically submitted a single entry for each contest they entered. Players paid a median of $87 in entry fees throughout the 2014 NFL season and experienced an overall median net loss of $30.7. However, we identified heavily involved sub-groups of players based on number of contests entered, total entry fees, and net loss. These top 1% groups were less likely to restrict themselves to NFL games, exhibited greater time involvement, but also won a greater percentage of the contests they entered than typical players. Our observations of typical and heavily involved players tend to mirror those generated in previous Internet sports gambling research.

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Fig. 1

Notes

  1. The N for this sample was determined based on a larger data export of three cohorts of DraftKings players who first deposited in 2013, 2014, and 2015. A total of 12,041 players first deposited money at DraftKings between August 1st and September 30th, 2013. The data export requested similar cohorts from 2014 and 2015 randomly selected from all players who first deposited between August 1st and September 30th during those years.

  2. Most of DraftKings' contests require some sort of entry fee to participate. These entry fees can be paid using a direct buy-in or a ticket (DraftKings' terms). Using a direct buy-in means paying for an entry using either U.S. dollars or "DraftKings dollars" (promotional currency given by DraftKings for use in their contests). The term "tickets" refers to vouchers that can only be used in contests with the specified entry fee. For example, a $3.00 ticket can only be used to pay for one entry into a contest with an entry fee of $3.00. We consider a contest a "paid contest" for a subscriber if (1) the contest was not free (i.e., entry fee greater than $0.00), and (2) that subscriber paid for at least one entry into that contest using a direct buy-in. We found that every subscriber in our sample was awarded three tickets for making their first deposit, which would make the first contest they pay for in tickets akin to a free contest.

  3. Some contests allow only one entry per subscriber, while other contests have a higher cap on the number of times a subscriber can enter. When a subscriber enters multiple times into the same contest, they can enter one or more lineups multiple times or build separate lineups for each entry. For example, if a subscriber entered a contest three times but used two distinct lineups, then two of the entries would have the same lineup, and the remaining entry would feature a different lineup.

  4. The members of the analytic sample participated in 819 free contests that awarded cash prizes during the 2014 NFL season. Of those, 712 contests had a $10 prize pool, awarding $2 each for first through fifth place. Although we do not have data on the actual number of entries into these contests, most of these contests (710, 86.7% of the 819) list the maximum number of entrants at 100,000. Contests with this payout structure that attracted the full 100,000 entries paid 0.5% of their fields.

  5. We compared our measures of player gambling behavior with and without free contests included and found that free contests did not drastically change the values of these measures (tables illustrating this comparison are available upon request).

  6. “Other” with respect to sports includes sports except NFL and NBA offered during the study period by DraftKings. These include Major League Baseball (MLB), College Football (CFB), National Hockey League (NHL), Golf (PGA), Soccer (SOCC), College Basketball (CBB), and Mixed Martial Arts (MMA).

  7. Specifically, to calculate contest risk, we worked from the payout structures for each contest in our data set, provided by DraftKings. The payout structure for a contest contains information on how the contest’s total prize pool will be distributed (e.g. $100 for the highest scoring lineup, $50 for the second-best through fifth-best, etc.). We multiplied the probability of winning in each category of a contest by the pay-off in that category minus the expected value of the contest squared—aggregating the latter statistics for all categories in the contest gives us the variance of the contest. We get the standard deviation of each contest from the variance, and then divide the standard deviation by the entry fee to get a measure of risk that is independent of entry fees. In other words, a 50–50 contest with a $2 entry fee will have the same risk as a 50–50 contest with $10 entry fee. The average of the entry-fee adjusted risk score for each contestant – depending on the portfolio of contests they participate in—gives us a risk score for each player.

  8. There were free contests that awarded cash prizes. They would generate nontrivial probability distributions and have non-zero risk scores. However, we believed that it would be more heuristically accurate to assume that free contests did not have any risk. Thus, we did not include them in these calculations.

  9. When a player enters multiple entries into a single contest, the total risk is not automatically a strict linear function of the number of entries. The payouts of two or more entries into the same contest are not independent. We did not have the data necessary to calculate correlations between the payouts of multiple entries. Thus, it was not possible to accurately account for this lack of independence when calculating players’ contest risk profile scores. As such, we chose to set aside the numbers of entries in each contest and limit our calculations to the risk scores of the contests themselves (i.e., the contribution to the risk score is the same whether the player entered multiple times or just once). We should note that, in our data, instances of players entering multiple entries or lineups into the same contest were rare. Therefore, we do not expect this choice of methodology to have a significant impact on our player contest risk scores.

  10. DraftKings only had birth year information available for 3,795 of the 10,385 subscribers in our sample. The average age and range are based on these 3,795 subscribers. (DraftKings had birth years available for 3990 of the 12,041 in the 2014 cohort.) Ten individuals in the sample were under age 18 at the time of the 2014 NFL season. The DraftKings tables to which we had access did not provide gender or race/ethnicity of their subscribers.

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Acknowledgements

A project of this magnitude requires the support and involvement of many. The authors extend special thanks to Greg Karamitis, Robert McGeehan, and Jacob Sachs for responding swiftly and thoroughly to our data requests, and to Tasha Chandler, Vanessa Graham, Pat Williams, Rhiannon Wiley, Alec Conte, John Kleschinsky, and Scarvel Harris, for providing support for this project.

Funding

DraftKings provided primary support for this study.

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Contributions

All authors contributed to the concept and design of this study and the writing of this manuscript. Drs. Edson, Singh, and Tom contributed to the analyses, had full access to all of the data in the study and take responsibility for the integrity of the data and the accuracy of the data analysis. All authors have approved the final article.

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Correspondence to Sarah E. Nelson.

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Conflict of interest

The authors also receive funding from the Foundation for Advancing Alcohol Responsibility (FAAR), The Healing Lodge of the Seven Nations via NIH and Indian Health Services (IHS), the Integrated Centre on Addiction Prevention and Treatment of the Tung Wah Group of Hospitals, which receives funding from The Hong Kong Jockey Club Charities Trust, the Massachusetts Gaming Commission, and the Massachusetts Department of Public Health.

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Nelson, S.E., Edson, T.C., Singh, P. et al. Patterns of Daily Fantasy Sport Play: Tackling the Issues. J Gambl Stud 35, 181–204 (2019). https://doi.org/10.1007/s10899-018-09817-w

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Keywords

  • Gaming
  • Fantasy sports
  • Gambling
  • Sports