I don't think a lack of experience, as much as optimizing for "growth" over sustainability.

I think they have a business that is not economically viable* without the sharks playing hundreds of lineups, so they are beholden to them. If you run those players off, you tank in the short term. If you let them do whatever they want, you (imo) limit the potential for the company in the long term due to running off fish way too quickly.

* - this is necessarily meant from a profitability standpoint, but from looking at the type of growth rates that VCs are going to want to see so that the funding and valuations are what they want/need them to be.

Well, the analytic is questionable:

However, doesn't DK have like, what, 80-100 employees? So the whole ".3% of 2 billion, ergo 6 million" seems sloppy.

And yet, even if it's gross -- that a small number of DK employees have buy-ins totaling ~$6 million dollars on FD is actually kind of incredible.

To Business Insider's credit -- or detriment -- they're not being very explicit here and leaving the reader to draw their own conclusions. But I think the conclusion you're supposed to draw is: wow, DK employees are gambling for huge stakes on FD. The implications from there, again, are left to the audience to draw -- but I suppose you're left to presume that the stakes are likely far in excess of DK salaries and equity in the company or whatever, so the likelihood of chicanery and misappropriated data is that much higher. Like the incentives for DK employees to leverage misappropriated DK data on FD seems really high once you realize they are collectively in for millions of dollars of buy-ins on FD.

I don't think this is responsible journalism per se but assuming the numbers are valid or close to it, it just reinforces the problems for the incestuousness of DK/FD. You might not like Business Insider's style and call it an overblown witch hunt, but any other industry where a small number of employees were investing millions in a competitors product would raise tons of eyebrows/scrutiny and rightfully so.

In sum, it's the same story I and others have alluded to: this has all the hallmarks of a super high growth bubbling industry headed for a combustible outcome. Anyone who has ready a Michael Lewis novel or two knows this story.

i dunno, 6M not that much imo. I'd guess more than 80 employees, but say 80 and that half of them play.. 150k/user or $500 a day in buyins if they were breakeven, 460 if winners? so a 5-10k bankroll for each? meh that's not that crazy at all. there a few grinders there that definitely do way more than their share of that.

i agree they want you to think "wow dk is gambling huge on fd"... but i dont think that really holds up. and despite saying the "what is not known if that is net winnings" the title definitely implies profit, or at least most will read it that way.

Ethan was a guy from RG prior to working at DK so his accounts and such were probably already public.

Whether PetrGibbons is making more on DK comes down to how much equity he has in FD. If he's got a significant amount of equity in a company valued at $1b+ (and has been increasing that valuation rapidly over the past few years) then I can definitely see him sticking around at least until his stock fully vests.

Heh, I think it was a guy from here that posted about it on RG and then here (talking about how his RG thread was locked/not responded to) that really brought the issue to light. Not sure anyone else really noticed the early leak. If that guy had gotten a faster response from DK on the RG boards maybe the whole thing doesn't blow up like this.

He joined a year ago at an entry level position... i actually interviewed for his position or a very similar one, so i can have a ballpark for what his shares would be worth and i doubt it's worth him sticking around for.

Perception is reality.The vultures start to circle and they extrapolate to the worst case scenarios.Francesa's talking about past posting,info selling,straw man accounts and the total lack of security.You know the uninformed public and pols are thinking one thing.IT'S RIGGED!

That's like a ****ton of money though, almost surely way way more than any of them make in salary and options at DK. So in principle their gambling stakes at FD > salary at DK and we all acknowledge their access to DK data (which I agree is the great unknown) could be hugely profitable at FD (e.g., copying sharp lineup picks).

This is where it moves out of the realm of conspiracy and into the study of incentives. Simply put, economics. So their stakes are FD are worth more than their job at DK. And when you get into these kinds of scenarios, misusing their access/data is wholly predictable. It's almost not even a question. It will happen.

It seems like they didn't learn anything from the Poker Industry after all. They seem to be doing it all over again.

Exactly things like this and allowing players multi entrys and allowing "bumhunting" are so bad for this game. When they realize it, it will be too late.

Imho they need to do way more thigns to "protect" the weaker players and "randomize" match making, but they seem to be occupied with data mining their own data and winning at the competitors site/getting rich now mentallity).

150k/user would probably be <15k per year in profit, assuming they're winners.. so not sure where you get that

not bad money, but certainly not replacing their salaries (with some exceptions, there are some that i'm sure win more at dfs... but people like steady incomes when industries like this can meltdown overnight)

this is basically exactly how I broke it down in the FACK:

I would rate myself as a fairly small DFS player and based on my rough estimation from my FPPs have churned through $35k in entry fees over the course of 56 weeks (I deposited just before before last NFL season began). I play a lot of NFL (>$1k/week), a little NBA, and some golf while only randomly entering contests in other sports with an expected -ROI whenever I feel degen or bored. If you say that there are 50 DK employees on FD and they have played for 18 months on average then you get an average of $6,666.67 in winnings/month.

It is important to note that if you are an 11% winner (a good winrate, but not unattainable for someone smart and capable of understanding the spots and lineup construction which most employees should be) then that is only $6k of monthly entries or $1500/week. This is hardly an incredibly high bar and if you've got a few guys putting in $10k/week of action then the bar gets even lower for everyone else.

The fact that they are using gross winnings to spin a headline as profit is disgusting though.

That headline is misleading but so was the tweet by Fanduel's PR that lead to that headline. I'm guessing most of the winnings are by a few people as opposed to being averaged across the whole company. Would be interesting to see the net.

Speaking of gross winnings I wish DK would stop using that to congratulate me for winning money when I had a net loss.

Business Insider is run by a guy who was banned from the securities business by FINRA and the SEC. People shouldn't put too much faith into the stuff they put out.
He also just sold the company at a huge profit too. Lol human beings

well FD can't exactly tweet about net winnings as a percentage since their player pool suffers net losses given that games are 0 sum without rake and they rake it to pay for operations and attempt to make a profit.

http://www.huffingtonpost.com/entry/...fc344?kxyfogvi

Senate Minority Leader Harry Reid (D-Nev.) and other lawmakers called for increased federal examination of daily fantasy sports Tuesday, just days after a new scandal engulfed the fast-growing industry.

Shocking that Senators from Nevada and New Jersey would lead the charge for investigations

This escalation is incredible. Based on mostly horrible reporting by idiots, based on mostly bad forum posts by idiots. A true corpse ****ing for the ages.

http://www.wsj.com/articles/i-won-mi...ges-1444171886

Props to Cory/Ray. Was unaware of your $25+ buy-in policy, class acts

Just slither away Harry.One of the sleaziest most corrupt figures in American politics has the bawlz to call something scandalous.Harry also said online gambling is "BAD FOR CHILDREN!" Pallone (D) is a 26 year career politician who is pro sports betting.Hopefully (R) Upton doesn't feel like doing these two hypocrites any favors.

so much this. tried reading the rg thread and it was completely unreadable and filled with idiot conspiracy theories and pure nonsense. the media coverage has barely been better with just terrible journalism from people who have done barely any research scrambling to put something out. outside the lines was the only decent coverage i've seen at all on tv. just tragic this very well might kill the industry as it gives a great opening for politicians with motivation to latch on to

Has anyone given an explanation about Ethan's insane MLB win rate on FD in August? Honestly trying to understand because on the surface, it seems pretty fishy

Explanation #1 - He's a good player, very good. Having DK ownership info wouldn't help anyways

Explanation #2 - Its a huge outlier that could only be explained by having inside information.

Yep, great article and agree with everything said. I wasn't aware of your buy in policy, major props for doing it yourself and trying to get others too as well.

It amazes me anyone on 2p2 thinks additional information is anything other than extremely +EV

Thanks!

We've been on a mission to get the high stakes regs to stop the micro HUs. Fairly successful for MLB, getting there for NFL.

Agree, good stuff