Profitability may become a bigger issue down the road. FD/DK are spending lots of VC money to build market share and also relationships with the sports leagues. Their world will be big enough that if/when they launch an IPO, the founders will become very rich.

Then these eventually huge public companies will be all about the bottom line.

While it is a huge growth industry right now, how much longer will it continue to grow exponentially? Handing out big cardboard checks and trips to the Playboy mansion is great, but it seems like the casual guy fan market is being penetrated right now. ESPN, NBC/Rotoworld, NBA, NHL, sports radio all offer DFS promotion or content.

The casual girl fan will probably never respond to those marketing efforts (especially when DK commercials talk about getting super models in your underpants). I know plenty of women who have discretionary income and are sports fans - attend NFL/NHL games and even play season long fantasy with friends - but they are spending their money on wine and pumpkin spice lattes, not a milly maker ticket.

Also IMO legalized sports betting will kill DFS growth because Joe Public degens would rather place $20 on the Cowboys than take time to fill out a fantasy lineup. Sports betting is coming, it's just a matter of time.

Nigel Eccles posted something on RG about DFS participation being the same in Nev. I'll try to dig it up but the feeling I got was he wasn't concerned about nationwide sports betting.

To be clear, I don't think legalized sports betting will shrink DFS, but I do think it will stop the explosive growth phase.

I think people are undersestinating how big this potential player pool really is (an edit acted 250 million+ U.S. citizens played fantasy last year). People already know it, already are familiar with it, and Already love it.

It's also still very much in growth (though I assume DFS will kill many traditional seasonal leagues). It's not like poker, which was a niche activity that had the fortune of having a guy named moneymaker with the WSOP in a year when ESPN expanded coverage like nothing it had ever done.

Sports betting and DFS can co-exist. Don't forget that also unlike poker, It's also easy to put money in and out. Even better will be if DFS sites are allowed to offer sport betting in addition. Now wouldn't that be convenient...

I wish I had shares in either of the top 2 sites right now.

There are between 318-350 million people in the USA (depending which data you reference). No way do I believe that 71.4%+ of all men, women & children - including the unbanked, unconnected (no phone/internet) and illegals played fantasy sports last year. ANY kind of fantasy sports.

If DFS wants to grow past legalized sports betting they should try expanding into other geographical markets outside North America.

May have been a worldwide figure. I'll check Reference after 7:00

and internet penetration in the US was only 81% in 2012 so that's obviously not correct.

I'm an idiot. I was getting it confused with how much vig it took in last year, according to fsta. Still, look at demographics and penetration. They are adding global sports to increase interest outside of North America and increase the fan base within.

The is a much broader market, IMO, than people give it credit for.


http://www.fsta.org/?page=Demographics

(keep in mind fsta has a rooting interest in this so figures should be approached with a grain of salt. Having said that, I have no reason to disbelieve (but that's not the scientific method).)

Isn't it just that a tiny fraction of people who participate in traditional fantasy sports have deposited to a dfs site? Seems like that is the conversion that needs to happen more than anything.

Yeah it does sorta have this problem too. Not only is the learning curve shallow compared to poker, you can just straight up buy picks and don't necessarily have to learn anything or think for yourself.

If the learning curve to become a moderate winner or slight loser is fast. This is not a bad thing. I hope 40% of the player pool is winners. Doubt it'll happen but I'll take it. Hell, I'd take 20%.

But I believe the data says that number is significantly lower? That could be an issue.

Let 'em learn.

Don't forget as poker players here(for the most part) this is more in our skill set than most. Finance guys (especially day traders), poker players, and young whippersnapper college kids are the primary Sharks.

Our view is myopic and biased.

Numbers are starting to show (while Fantasy is legal and Sports Betting isnt) that it's the other way around.
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Obv, the unregulated market for sports betting is much much bigger:

I disagree. Poker was getting much tougher way before the IEGEA (whatever the acronym is). I think poker was doomed when the real estate market crashed. There was so much easy money for mortgage brokers, real estate brokers, etc. at the time that these guys had tons of extra money to play, along with big egos. Once real estate went down, the fish were leaving the high stakes games regardless of the law.

Somehow, the DFS sites have to keep the pros out of the $1 and $2 games so that people don't lose their money as fast. I don't know how they do that, but it is necessary to build the player pool IMO. If everyone can only play Condia, or someone else using the same lineup, they won't stay for long.

do player prices change during the day like sports betting markets?

if not, how often are they adjusted? and is there any fear that at some point they change during the day as an anti-sharp measure?

No.

Daily, and no, fair game for all must be honored.

I used to have trouble remember it and someone said to me, think about:

Unlawful Internet Gambling, and what it means to you, and now you'll never forget: UIGEA.

Great points, people forget about the economic storm that truly undermined a game like poker, all happened at the same time as the law.

I read that whole presentation. That chart shows DFS entry fees for ALL of North America, but sports betting handle for ONLY Nevada.

If single event sports wagering were available to all 50 states (and all of Canada) I don't think their projection would look so rosy.

Anyone have any idea how long something like the Washington bill might take to pass?

BTW - sports betting is regulated in Nevada and NV only, so thus that chart and I added more:


ahem... http://forumserver.twoplustwo.com/sh...3&postcount=62

Joe, you are telling me there is no legal sports betting in Delaware and throughout Canada? That is not true, I have placed sports wagers in both places.

Delaware offers football parlay wagers on NFL.

From their most recent available annual report (2012), the Ontario Lottery & Gaming Commission (OLG) claimed sales of $272.3mm on their pro-line sports lottery games, with prizes paid of $162.5mm, for a net of $109.8mm! This includes a $100 limit on wagers, per person per day and is not available online, only through lottery terminals. This is only ONE province in Canada!

This DOES NOT include additional legal sports wagering offered at casinos throughout Ontario & Canada.

Link (page 17): http://www.olg.ca/assets/documents/a...port_11-12.pdf

Enough of the derail. My main points here are:

1) Given the choice the average consumer will choose sports betting more often over DFS.
2) Sports betting is proven to be profitable. DFS will have to increase rake substantially to clear the same percentage of profits.

I think one appeal of dfs over traditional sports betting is massive prize pools. Ain't gonna ship a millball betting -110s.

No, not at all. My link was too the overall non-regulated sports betting market, which dwarfs anything really.

What is interesting, is that this "me/now" generation might not get to know what a sports bet is. Basically, they are learning fantasy sports as a replacement.

I agree with this. The average consumer simply wants to plunk down a bet to create a more emotional experience in the game. They probably couldn't name the majority of starters for both teams. They are willing to eat the -4.5% house edge as a cost of entertainment. Again, this is the average consumer.

The more rabid sports fan who actually follows the entire league and can recite each team's depth chart will prefer fantasy sports. This is a much smaller subset of the typical sports fans. There will always be an audience for it, it's just more limited. I think right now we're seeing the first group being pushed into the 2nd group due to a lack of available alternatives. Sports leagues have realized this and is why they prefer fantasy sports which build interest in the league while sports betting does not create the same loyalty.

I'm wondering about this too. I heard it's in progress?

http://app.leg.wa.gov/billinfo/summa...5284&year=2015

Looks like the Senate bill is scheduled to be read at a public hearing on Friday.