Difference between revisions of "Daily Fantasy Sports"
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| + | == Data Scandal == | ||
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| + | In October 2015 a DraftKings employee, Ethan Haskell, won $350,000 in a FanDuel contest [<ref name=Scandal>Scandal Report: http://fortune.com/2015/10/07/draftkings-fanduel-scandal-timeline/ </ref>]. Haskell gained this money by placing second in FanDuels’s NFL Sunday Millions contest. | ||
| + | |||
| + | It is believed that Haskell was able to win these contests, in part, because of his access to player ownership data <ref name="Scandal"/>. This means he may have seen which NFL players had been selected by DraftKings users, and by how many users. This information would have given him an advantage because the two sites work very similarly and typically have the exact same price for each player in a given week. | ||
| + | |||
| + | === Company Response === | ||
| + | |||
| + | In response to the scandal, Draft Kings and Fan Duel released a joint statement <ref name="Scandal"/>: | ||
| + | |||
| + | “Nothing is more important to DraftKings and FanDuel than the integrity of the games we offer to our customers. Both companies have strong policies in place to ensure that employees do not misuse any information at their disposal and strictly limit access to company data to only those employees who require it to do their jobs. Employees with access to this data are rigorously monitored by internal fraud control teams, and we have no evidence that anyone has misused it.”<ref name="Scandal"/> | ||
<references/> | <references/> | ||
Revision as of 04:49, 19 February 2017
Daily Fantasy Sports (DFS) is a subset falling under the broader umbrella of fantasy sports. These games follow the same model as traditional fantasy sports, in which players compete against one another in assembling teams of professional athletes in a specific league and ultimately earn points based on the statistical performance of these players in their real-world competitions. Daily Fantasy Sports differ from traditional fantasy sports in their time span. Daily Fantasy Sports competitions are much quicker, often spanning just a single day or week, as opposed to the full season [[1]]. The Daily Fantasy Sports market features two main companies, the Boston based Draft Kings and the New York based Fan Duel.
Contents
Gameplay
Gameplay: Daily Fantasy Sports are offered for a variety of leagues including: NFL, MLB, NBA, NHL and even less popular leagues like MMA or CFL. [[2]]
There are two main categories of daily fantasy sports: cash games and tournaments [[3]]. In cash games player’s who outscore at least 50% of the competition are deemed as winners. These winners receive a payout of roughly double their entry fee. Tournaments typically pay out entrants who score in the top 20% [[3]]. In both cases, entrants who are below the given threshold lose their entire entry fee.
In each of these play styles; entrants assemble a team of professional athletes who have each been assigned a cost. These entrants must strategically assemble a team that does not exceed the “Salary Cap” constraint; which is the maximum amount a team’s player cost can sum up to [[4]].
Background of Major Companies
Two companies currently capture 95% of the US daily fantasy sports market: Draft Kings and Fan Duel [[5]].
Major Companies
Fan Duel
Fan Duel was launched by the web based prediction market Hub Dub Hub Dub , in July 2009. FanDuel has partnerships with the NBA and multiple individual NFL/NBA clubs [[6]]. FanDuel generated $1.8 billion in Revenue over 2015 [[7]].
Draft Kings
Draft Kings was established in January of 2012 by former Vistaprint executives Jason Robins, Paul Liberman and Matt Kalish. Draft Kings has partnerships with the MLB, NFL Players Association, MLS, NHL , and many individual teams [[6]]. DraftKings generated 1.6 million in revenue in 2015 [[7]].
Merger
After facing similar regulatory and legal challenges, FanDuel and DraftKings reached an agreement to merge [[8]]. DraftKings Chief Executive Jason Robins will serve as CEO of the new company, while FanDuel chief Nigel Eccles will be chairman [[8]]. Robins stated that merging will allow the companies to pursue innovative ideas by freeing up capital [[8]]. Pending approval by the Federal Trade Commission, the merger will close in late 2017 [[8]].
Data Scandal
In October 2015 a DraftKings employee, Ethan Haskell, won $350,000 in a FanDuel contest [[9]]. Haskell gained this money by placing second in FanDuels’s NFL Sunday Millions contest.
It is believed that Haskell was able to win these contests, in part, because of his access to player ownership data [9]. This means he may have seen which NFL players had been selected by DraftKings users, and by how many users. This information would have given him an advantage because the two sites work very similarly and typically have the exact same price for each player in a given week.
Company Response
In response to the scandal, Draft Kings and Fan Duel released a joint statement [9]:
“Nothing is more important to DraftKings and FanDuel than the integrity of the games we offer to our customers. Both companies have strong policies in place to ensure that employees do not misuse any information at their disposal and strictly limit access to company data to only those employees who require it to do their jobs. Employees with access to this data are rigorously monitored by internal fraud control teams, and we have no evidence that anyone has misused it.”[9]
- ↑ Wikipedia Page: https://en.wikipedia.org/wiki/Daily_fantasy_sports
- ↑ Draft Kings Site https://about.draftkings.com/
- ↑ 3.0 3.1 Rotoworld Guide http://www.rotoworld.com/articles/nba/48892/425/cash-games-vs-tournaments
- ↑ Salary Cap Explanation http://venturebeat.com/2015/09/10/how-to-make-a-killer-daily-fantasy-sports-football-roster-on-draftkings-and-fanduel/
- ↑ Advertising Age Publication: http://adage.com/article/media/draftkings-fanduel-spe/300658/
- ↑ 6.0 6.1 Partnerships http://www.legalsportsreport.com/dfs-sponsorship-tracker/
- ↑ 7.0 7.1 Revenue Report: http://dailyfantasynews.com/fanduel-collected-600-million-more-in-entry-fees-than-draftkings-in-2015
- ↑ 8.0 8.1 8.2 8.3 Partnerships http://www.legalsportsreport.com/dfs-sponsorship-tracker/
- ↑ 9.0 9.1 9.2 9.3 Scandal Report: http://fortune.com/2015/10/07/draftkings-fanduel-scandal-timeline/
