Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

The implosion of the daily fantasy industry

espn.com

Post reply on HN
Print view View original

11–20 of 52 posts

Re: The implosion of the daily fantasy industry

#11

Post by bradwschiller »

I think what's missing here is that the product is sticky for a number of people and spending on user acquisition costs are likely to go down. Each company essentially takes a 10% rake on every game and I'd imagine these companies will be profitable in the long. I don't think legal issues will destroy these companies as it's really only a matter of time before sports gambling becomes legal across the US and New York is already letting these companies continue to operate this year.

I don't believe the issue around small numbers of players making all of the money is important. As someone who uses both platforms for fun, I find I'm willing and many of my friends are willing to lose a bit of money each week as it makes the games far more entertaining to watch when you have a rooting interest. Many of the sports leagues and ESPN realize this which is why you saw them invest in these companies. Fantasy leads to more engagement with the sports and daily fantasy leads to even more engagement.

Daily fantasy is not for everyone, but it'll likely maintain a core number of users, many of whom use both FanDuel and DraftKings. Acquisition costs will be less important in the future and provided that fixed costs such as legal fees decrease in the coming years, these companies will become stable and profitable.

Re: The implosion of the daily fantasy industry

#12

Post by meddlepal »

hackuser wrote: post #9
exolymph wrote: post #2

For what it's worth, Fortune writer Dan Primack said on Twitter, "There is an amazing amount wrong with this ESPN piece on DraftKings/FanDuel. Awful." https://twitter.com/danprimack/status/768463010503467009 Then followed up: "ESPN and @DVNJr write that daily fantasy has 'imploded.' Really? Both leading players are still operating. [...] True neither FD nor DK are profitable. But they are young tech startups. Lack of…

Does anyone know what Primack's axe to grind is? Because it's such a strong, emotional objection, I suspect there's more to it than a dispute over the facts and analysis.

Maybe he is an investor...

Re: The implosion of the daily fantasy industry

#13

Post by sbov »

Animats wrote: post #10

It really is a game of skill. And that's killing the industry. The good players, with a big bankroll and computer support, can win. Everybody else is a sucker. Like the stock market. So the suckers are bailing.

Yeah, but in most games of skill you have some system in place to ensure your best players don't drive away the worst. When money gets involved things become murkier though.

Re: The implosion of the daily fantasy industry

#14

Post by robinhowlett »

I haven't read this (long) article in its entirety yet but I did make this presentation[1] last year to satisfy my interest in the space and help me understand where it stood.

I borrowed a lot from Adam Krejcik's tweets, who is quoted in this article. See slide 21 for notes about player attrition

[1] http://www.slideshare.net/robinhowlett/daily-fantasy-sports-...

Re: The implosion of the daily fantasy industry

#15

Post by jackschultz »

I write my own golf blog, with weekly previews of the tournaments, and as a way to get traffic, I'd post a weekly DFS picks post, and then link to both articles in a reddit comment on the DFS subreddit[1]. The idea being that people would look at the pics, but also read the more interesting preview I'd write.

I eventually stopped doing that after seeing weekly posts on that subreddit about how people were losing too much money and had to stop playing for a while. Didn't want to keep messing around helping people lose money. Always that side to an industry based on gambling.

[1] https://www.reddit.com/r/dfsports/

Re: The implosion of the daily fantasy industry

#16

Post by jarrettch »

swang wrote: post #5

i don't know how accurate the article is but arguable the dfs industry is shrinking. almost no one other than fanduel/draftkings exists on a scale to possibly make a profit. and then you have state governments trying to ban them or charge them with crimes. the biggest long term problem i see (and the article partially addresses) is all these pros bumhunting the low-stakes games because there's no reason not to. it do…

I've played both, and it's much easier to withdraw from DraftKings than it was from PokerStars/Full Tilt/Party Poker.

In the dark days of online poker after they shut down a lot of the payment vendors, I'd get shady looking checks from some middle man that I had to wait weeks for at times(never played/won enough to need wire transfers or fancier methods). That was horrible.

I've had withdrawals from DraftKings that take a day or two and go straight to my credit card or PayPal account. FWIW I play in California.

Edit: To be fair, paper check withdrawals did get faster as time wore on. Not sure how it is now. I live in SoCal and always preferred the card rooms than online poker anyway, so it's not worth the trouble for me.

Re: The implosion of the daily fantasy industry

#17

Post by hsod »

hackuser wrote: post #9
exolymph wrote: post #2

For what it's worth, Fortune writer Dan Primack said on Twitter, "There is an amazing amount wrong with this ESPN piece on DraftKings/FanDuel. Awful." https://twitter.com/danprimack/status/768463010503467009 Then followed up: "ESPN and @DVNJr write that daily fantasy has 'imploded.' Really? Both leading players are still operating. [...] True neither FD nor DK are profitable. But they are young tech startups. Lack of…

Does anyone know what Primack's axe to grind is? Because it's such a strong, emotional objection, I suspect there's more to it than a dispute over the facts and analysis.

You think "There is an amazing amount wrong with this ESPN piece on DraftKings/FanDuel. Awful." is a strong, emotional objection?

Re: The implosion of the daily fantasy industry

#18

Post by someone7x »

z2 wrote: post #4

With user acquisition costs of "$190 per user for DraftKings and $110 for FanDuel" [0], what, besides long term casino-style gambling addiction, can hope to recover the costs? And unlike casino gamblers, don't 'bro-classic' people tend to grow out of these things after a while? [0] http://www.usnews.com/news/articles/2015/10/30/draftkings-fa...

Honestly, I'm thinking long term freemium-style addiction can hope to recover those costs.

I was surprised that they didn't monetize some of the analytics (or whatever utility player scripts were providing) that the big winners were using after banning them from using their own scripts.

But then again, a lot of the decisions described in the article were surprising.

Re: The implosion of the daily fantasy industry

#19

Post by Spooky23 »

sbov wrote: post #13
Animats wrote: post #10

It really is a game of skill. And that's killing the industry. The good players, with a big bankroll and computer support, can win. Everybody else is a sucker. Like the stock market. So the suckers are bailing.

Yeah, but in most games of skill you have some system in place to ensure your best players don't drive away the worst. When money gets involved things become murkier though.

When you tie an arm around the "skilled" player's back, you can't justify claiming that what you do isn't gambling.

Re: The implosion of the daily fantasy industry

#20

Post by sbov »

Spooky23 wrote: post #19
sbov wrote: post #13

Earlier quoted context omitted.

Yeah, but in most games of skill you have some system in place to ensure your best players don't drive away the worst. When money gets involved things become murkier though.

When you tie an arm around the "skilled" player's back, you can't justify claiming that what you do isn't gambling.

It's not about tying their arm behind their back, it's about putting skilled players against skilled players. In pretty much any skilled game you have rough tiers that people of similar skill level face eachother.

In general, high school teams don't play against pro teams. And if they do, we don't call the high school team "suckers" if they lose.

Post reply on HN