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Fantasy Sports Employees Bet at Rival Sites Using Inside Information

nytimes.com

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Re: Fantasy Sports Employees Bet at Rival Sites Using Inside Information

#11

Post by icelancer »

FanaHOVA wrote: post #8
ddlatham wrote: post #5

Earlier quoted context omitted.

From the article: The data that DraftKings acknowledged was released by its employee, Ethan Haskell, showed what particular players were most used in all lineups submitted to the site’s Millionaire Maker contests. Usually, that data is not released until the lineups for all games are finalized. Getting it early, however, is of great advantage to make tactical decisions, especially when your opponents do not have the…

Even with that, you'd still have to be good enough to pick the best roster. I don't think it's as useful as the article makes it sound.

Huh? You just use the company's internal pricing model and use it on other sites once you know discrepancies. It's not "simple" but it's not genius level derivatives trading, either.

Re: Fantasy Sports Employees Bet at Rival Sites Using Inside Information

#12

Post by icelancer »

zem wrote: post #9
ddlatham wrote: post #5

Earlier quoted context omitted.

From the article: The data that DraftKings acknowledged was released by its employee, Ethan Haskell, showed what particular players were most used in all lineups submitted to the site’s Millionaire Maker contests. Usually, that data is not released until the lineups for all games are finalized. Getting it early, however, is of great advantage to make tactical decisions, especially when your opponents do not have the…

so it's basically using the "wisdom of the crowds" that play on the DraftKings site to put together a really good pick? that still seems like it shouldn't count as equivalent to insider information, because it's aggregating a bunch of guesses that have no information either.

No. If 60% of people pick Player X, his value goes down. This is parimutuel betting. You don't want significant overlap if you can help it; how would you beat the crowd otherwise?

You find outliers and apply a pricing model that finds the best gaps. The information is incredibly valuable. Take it from someone who did this for a living at one point.

Re: Fantasy Sports Employees Bet at Rival Sites Using Inside Information

#13

Post by wolf_cook »

zem wrote: post #4

someone please explain like i'm five - according to the wikipedia page, fantasy football scoring is based on the actual performance of the athletes you pick in an actual game. therefore, if the games themselves are not fixed, there should be no possibility of "insider information" - what information could the companies running the pool have that the general public do not? the article didn't make it any clearer.

I think when assembling a team on these websites that you get some fixed amount of cash to buy players to put on your team. The website uses the data on how many people play each football player to generate the cost of these players. I think this means then that employees can use this understanding of the value of players and the relative frequency that they are chosen to pick smarter.

I think in general, one would benefit from accurately picking players with great expected values who are also generally under-picked.

Re: Fantasy Sports Employees Bet at Rival Sites Using Inside Information

#14

Post by thekevan »

zem wrote: post #4

someone please explain like i'm five - according to the wikipedia page, fantasy football scoring is based on the actual performance of the athletes you pick in an actual game. therefore, if the games themselves are not fixed, there should be no possibility of "insider information" - what information could the companies running the pool have that the general public do not? the article didn't make it any clearer.

In the late 90s, I knew a guy who ran a free "pick the winner" football web site. He said he did it because of the phrase, "the masses are the asses", which means that the general public as a whole bets incorrectly and loses a majority of the time.

This may be a bit of a simplification of what he actually did, but it was my understanding that he would see the trends in how his users were betting for the week, then looked at at past performance and used that info to make bets himself. He started making quite a bit of money doing just that.

So generally, if you have data on how people are expecting games to go and have knowledge about the different betting and/or gaming sites, you have an advantage over the other players.

Re: Fantasy Sports Employees Bet at Rival Sites Using Inside Information

#15

Post by zem »

pboutros wrote: post #10
zem wrote: post #4

someone please explain like i'm five - according to the wikipedia page, fantasy football scoring is based on the actual performance of the athletes you pick in an actual game. therefore, if the games themselves are not fixed, there should be no possibility of "insider information" - what information could the companies running the pool have that the general public do not? the article didn't make it any clearer.

"The data that DraftKings acknowledged was released by its employee, Ethan Haskell, showed what particular players were most used in all lineups submitted to the site’s Millionaire Maker contests. Usually, that data is not released until the lineups for all games are finalized. Getting it early, however, is of great advantage to make tactical decisions, especially when your opponents do not have the information at al…

so he was trying to bet on which way the odds would be placed and get in ahead of that, with some sort of hedging that would work regardless of how the games turned out? i have a feeling there's some key insight i'm missing here - is this like placing a bet on a dark horse before the public catches on and the odds swing closer to even?

Re: Fantasy Sports Employees Bet at Rival Sites Using Inside Information

#16

Post by slg »

ddlatham wrote: post #5
zem wrote: post #4

someone please explain like i'm five - according to the wikipedia page, fantasy football scoring is based on the actual performance of the athletes you pick in an actual game. therefore, if the games themselves are not fixed, there should be no possibility of "insider information" - what information could the companies running the pool have that the general public do not? the article didn't make it any clearer.

From the article: The data that DraftKings acknowledged was released by its employee, Ethan Haskell, showed what particular players were most used in all lineups submitted to the site’s Millionaire Maker contests. Usually, that data is not released until the lineups for all games are finalized. Getting it early, however, is of great advantage to make tactical decisions, especially when your opponents do not have the…

And to translate that to a potential game strategy, in large contests like these you generally want to zig when everyone else zags. Think of it like a lottery where you know what numbers everyone is playing beforehand. If 100 people bet 12345 and 0 bet 54321, you are better off choosing 54321. It won't necessarily get you a win, but it will help increase you expected value of return by knowing which popular numbers/players it is smart to avoid using.

Re: Fantasy Sports Employees Bet at Rival Sites Using Inside Information

#17

Post by swanson »

zem wrote: post #4

someone please explain like i'm five - according to the wikipedia page, fantasy football scoring is based on the actual performance of the athletes you pick in an actual game. therefore, if the games themselves are not fixed, there should be no possibility of "insider information" - what information could the companies running the pool have that the general public do not? the article didn't make it any clearer.

Let's say that you, zem, are an expert player and you have entered a roster into DraftKings Million Dollar contest.

I, swanson, am an employee of DraftKings and have access to your lineup and/or data about all the other lineups entered. (* This is speculation)

I, swanson, then use this inside knowledge to make my own lineup on FanDuel (I am not allowed to play on DraftKings because I work there). I win big money on FanDuel.

---

The results of the NFL games are not the inside information, but rather the game theory-esque information about the decisions made by other parties in a zero-sum game. Knowing which players the elite top 1% players are playing is an advantage. Knowing which players appear in the most (or least) lineups is an advantage. This data is only available to insiders (employees of the companies), so that is where the "insider information" analogy is coming from.

Re: Fantasy Sports Employees Bet at Rival Sites Using Inside Information

#18

Post by zem »

icelancer wrote: post #12
zem wrote: post #9

Earlier quoted context omitted.

so it's basically using the "wisdom of the crowds" that play on the DraftKings site to put together a really good pick? that still seems like it shouldn't count as equivalent to insider information, because it's aggregating a bunch of guesses that have no information either.

No. If 60% of people pick Player X, his value goes down. This is parimutuel betting. You don't want significant overlap if you can help it; how would you beat the crowd otherwise? You find outliers and apply a pricing model that finds the best gaps. The information is incredibly valuable. Take it from someone who did this for a living at one point.

aha, looking up parimutuel betting made it a lot clearer. thanks!

Re: Fantasy Sports Employees Bet at Rival Sites Using Inside Information

#19

Post by jaynos »

zem wrote: post #4

someone please explain like i'm five - according to the wikipedia page, fantasy football scoring is based on the actual performance of the athletes you pick in an actual game. therefore, if the games themselves are not fixed, there should be no possibility of "insider information" - what information could the companies running the pool have that the general public do not? the article didn't make it any clearer.

The advantage is in knowing what percentage of football players are started by the entire pool entrants. This information is released once that particular game is started (e.g. % start for NY Giants players would be known to all at 1 PM when their game started and % start for Denver Broncos players would be released at 4PM when that game started), but was known ahead of time by those who worked for the company. While these %'s would not be exactly the same between Fan Duel and Draft Kings, they should be close enough.

How does this all help you win? You can get an average return in a tournament (e.g. buy in for $10 and win $15 or $20) by playing high point, low variance players (safe bets), but to win big, you need to play high variance players (e.g. the wide receiver who will probably score 4 points, but might score 20-30 pts if they have their best week of the year). That said, if everyone plays the same high variance player, you will be beat by or end up tying with many other players. So, if I have two high variance players that I think may have a good week, one who is owned by 8% of teams and one who is owned by 1%, I am better off playing the 1% player who will put me ahead of the field if he scores big.

Edit to add information for those that aren't familiar with daily fantasy:

Each player gets a salary and you are working under a salary cap that prevents you from making a team consisting entirely of "studs" (the top players at each position). If salary cap is 10X, then the average salary on your team needs to be X. A "safe bet" like Tom Brady or Aaron Rodgers will cost you close to 2X. So for every safe bet you need to pick a long shot like Tavon Austin (who Yahoo tells me was owned by 1.4% of daily fantasy players) with a salary just over X/2.

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