Have FanDuel and DraftKings Screwed Up?

Last Saturday, I was watching Daily Show re-runs from the previous week. When I saw FanDuel and DraftKings had wrangled a lead story, I was happy. Obviously the segment was going to be about the “insider trading” scandal. DraftKings employees have made around $5 million on FanDuel. It’s bullturds, but it’s also hard to get too bent out of shape about it.

I expected Trevor Noah to make light of the scandal. After all, it’s kind of silly. Instead, the whole thing came off as decidedly serious. Yep, the Daily Show ran a mostly serious lead segment about the evil DFS industry. Uh oh.

It occurred to me that the DFS industry had stepped in it. And their disingenuous ad bombardment was only exacerbating the problem. Sure enough, the #LetThemPlay movement and a FanDuel petition were gathering steam by Saturday night. All of a sudden, it felt like DFS was in serious jeopardy.

Usually an ad blitz campaign is just one of those negative symptoms of capitalism. Watching a sports game? Sorry, in between feats of athletic prowess, you’re going to see 80 beer ads (mostly piss water) and 20 boner pills (the same two brands) over the next three hours. I consider these DFS ads to be a worthy change of pace. At least for now.

The problem with the ads is their shortsighted nature. Remember Pokerocalypse? I wasn’t affected because I stopped playing about a year earlier. I figured out that I was making about $1.50 per hour and wasn’t getting any better.

I mention poker because it’s qualitatively similar to DFS. It’s a game of skill with billions of dollars at stake. Poker actually requires more skill in my opinion – DFS is a lightly-skill-based lottery. If the industry doesn’t have protection against something like DFSocalypse, then why are they raising their profile?

Ultimately, the ads aren’t the problem. The lawsuits and federal investigations were initiated well before all of this NFL/postseason spam. They’re only calling more attention to a problem. A bigger problem is the growing sense that the games aren’t fair.

I saw a statistic on Twitter recently. Caveat: I didn’t bother to validate if it was true. FanDuel claimed that DraftKings employees had won “just” 0.03 percent of prizes. That worked out to about $5 million. That’s quite a pay day. Of course, we don’t know about their buy-ins. Maybe they spent $2.5 million for their $5 million. Maybe they spent $4.9 million. Maybe less than $1 million. We don’t know. Presumably, they’ve made money.

DFS comes with a learning curve. It’s deceptively large. So many people still use batter versus pitcher data for baseball. They’ll never stop because they’ve never read The Book. Without using science, any strategy can feel successful. Even BvP-based lineups.

There needs to be a fair space for amateurs to compete. They should have a chance to learn the game without playing against machines. Quants own the landscape. The DraftKings controversy is a drop in the bucket. Imagine how much money is going to quants – the guys who use server farms to pick their lineups and automatically match against the worst head-to-head players. Hint, it’s a lot more than 0.03 percent.

Those are the biggest problems with the ways FanDuel and DraftKings run their businesses. But there is plenty to like too. As long as you stay within yourself, you can have a lot of fun without hurting your bank account. Even if the game is rigged against ordinary players, it should never get as bad as poker in its heyday. With even a tiny amount of preparation, you’ll always have a real, legitimate chance to win any contest.

I have a vested interest in the outcome of this controversy. Over the last calendar year, roughly half of my earnings are related to writing about DFS. The sites themselves are some of the biggest advertisers on all fantasy baseball sites. They indirectly pay for normal fantasy analysis too. That’s why I signed FanDuel’s petition. Perhaps it’s melodramatic to say my job is on the line. Perhaps not. To me, it seems clear that DFS is ripe for some simple regulation.

The current state of affairs offers too many rewards to power users. The sites should probably ban their employees from playing on other platforms – offering better pay should be sufficient. They should also find a way to help new and amateur users avoid Skynet quants. But ultimately, it seems ridiculous to shut down DFS sites. It would needlessly cripple the entire fantasy industry.