My Introduction to Fantasy Sports Betting in the US

disclaimer: not investment advice!

As the pandemic has kept us all inside, I’ve been looking at new hobbies and new ways to grow. I have taken some interest in professional sports but have never really found myself as invested as others around me. One of my friends insists that purchasing an app or tool will help motivate them to make use of the app/tool. I figured the same could be applied to my situation and I decided to learn what I could about the state of fantasy sports betting.

To be clear, the goals of this project were:

  • understand the landscape of fantasy sports betting: Which apps are used? What tools are available? What is fun/difficult during the process? Are there any interesting technical challenges in the tech stack? Are there any missing tools that I could build?
  • spend more of my time watching sports instead of anime/Netflix
  • if the stars align, maybe make a few dollars

Sports Betting in the US

Betting the United States is complicated. First, you need to decide on the sport. As I understand, betting on horses is somehow different than betting on football so if you only plan to bet on horses, you are better off finding another article to read.

I believe that this “normal” sports betting is referred to as a “Sports Book” so you may see it called that. From my knowledge, this type of betting is usually about who will win and by how many points. More advanced bets can take place across multiple games. Without getting into too many details, I think this style of betting comes down to two things:

  1. It is probably not legal in your state
  2. If the betting doesn’t take place in the US, you’ll have to build trust with some other platform located somewhere else in the world. This seemed a bit too risky for my experiment but it might be worth exploring if you are aware of legal risks, if any.

Fantasy Sports Betting in the US

Apparently, fantasy sports betting is different that normal sports betting. I don’t understand how the two could be different as “fixing” results in both cases would result in some players with unfair edges. Nonetheless, Fantasy Sports Betting seems “permitted” so I figured I would start here. (DraftKings Chart)

These seem to be the most popular apps in the US. I was able to create accounts on both apps and didn’t really face any issues depositing money. I think both accepted PayPal as I was able to withdraw money back to my PayPal account. I think DraftKings (DKNG) has been around longer as it is publicly traded and has some partnership with the NFL. This age is definitely noticeable in both their web app and their mobile app though I never had a problem with functionality, mainly just “look and feel.” On the flip side, FanDuel does have a pretty nice UI. However, there is one deal breaking difference: withdrawals. FanDuel will only let you withdraw funds won from bets, not funds deposited. As the underdog, I understand that they need to “lock” customers in and encourage people to use their product but this approach doesn’t seem very honest to me.

The First Few Bets

One neat thing about both platforms is that they give you tickets that will let you enter contests for free. This is probably the best way to get started as you can learn some of the basic features of the app. Both apps have different ways to filter: sometimes you might to focus on one game, other times you might want to focus on the contest itself. I think both apps have a default view of the “Contest” view which will highlight the “Total Prizes.” I was hoping there was some calendar feature where I could find games that fit my schedule and bet around that. I suppose most people betting are used to the normal times that games are on and already incorporate the games into their schedule.

I decided to bet on some soccer games as I enjoy that sport the most. Unfortunately, my sleep schedule is wrecked and I wasn’t able to wake up earlier enough to catch the games but that didn’t stop me from losing! Both apps has the concept of “Guaranteed” contests that will run no matter what (though I would guess that payouts are adjusted so the house still makes some money). I would guess that custom games probably makes more sense for 1:1 duels.

It is also worth noting that most lobbies end up filling up within hours of a contest starting. I would guess that most gamblers do this to avoid having to adjust bets before a game to compensate for information changes. Both apps do a good job at trying to provide up-to-date information on the players and use colors to highlight possible events in the news that could influence if a player will play or not.

My first mistake: betting on a player that was injured. Yes, you are allowed to include players that won’t play in the game. I think I was so interested in the predicted points-per-game column that I didn’t notice the red circle that indicated the player likely wouldn’t play in the game. This is lesson best learned the hard way. Doh!

first mistake

The rest of my contests:

no merry millions for me :(

Fortunately, I had a bit more luck on FanDuel to balance out the loss from my deposit bonuses:

clearly more informed than 400,000+ people XD

It was clear that I needed to get my act together to avoid as much loss as possible. I didn’t bet for a week then decided it was time to get my money out. This is when I found out about FanDuel’s withdraw policy. Time to gamble again!

Next Few Bets

I had deposited $100 and I wanted that money back. This meant I had to set some rule and learn from my mistakes above:

  • No multi-game bets: there are too many players (variables) for me, an amateur, to understand. This will also avoid the fatigue of waiting for many games to complete.
  • No more soccer: given my understanding of the sport, goals are too unpredictable and I am not confident that player performance is consistent between matches. I could be wrong on this but I wanted a sport where “samples” are higher. Basketball seemed like a decent sport to bet on as players are almost always scoring/assisting/passing.
  • No complicated payout structure: I need to get my money back and I don’t want to deal with being 5th and not 1st as I have no real edge in these bets. 50/50 will have to do.

Both platforms have contests that have $1/2/5/10/25 entry fees. I figured going all-in with the same roster across all 5 contests might be a fast enough way to win the money back or lose it all (saving time).

In terms of picking players, I went with FanDuel’s “Guru Suggestions” feature. As you’ll see below, this didn’t work out.

Second mistake: The app will try to help you win.

Beginner Games:

$1
$2

Non-beginner Games:

$5
$10
$25

Even with the same lineup, you can see that the lineup did progressively worse as the competitions increased in entry fee. To me, this meant that the gamblers in the latter contests are likely more informed (or rather, amateurs like me are not betting).

Third Mistake: Don’t underestimate your opponents. In fact, you probably only care what they bet on to bet something different.

I still felt that this strategy was the best “play” I had. I drafted a lineup picking the star players. It turns out that everyone else also picked these players (given that this is one game, there aren’t many high performers to choose from). You can see in the picture below that the “Percent Drafted” stat will show you how many other gamblers have drafted that player. By drafting similar players as the others, I can assure myself that I will perform nearly the same as them.

my draft from the $25 competition

Next step was to analyze the competition (in the $25 contest). It seemed that “Part One” of this bet is picking who would end up in the MVP/STAR/PRO position. Embiid, Vucevic, and Simmons were the best players (also apparent in virtual currency needed to draft them)

The “Part Two” of this draft is when you run out of virtual money for your draft and you need to pick the 4th and 5th players. I assume this is where most of the gambling takes place as you aren’t allowed to submit a four person draft with high performers. Seth Curry seemed like a good pick (also evident from % drafted). Last pick was up for grabs so I decided to pick a non-starter from Orlando hoping that Philidelphia’s overwhelming strength would force them to play more bench players.

As you’ll below, I had a nearly identical draft as 17 of the 22 people entered in the competition:

permutations of {Embiid, Simmons, Vucevic} + Bacon, Curry

Fortunately, this bet seemed to work and Birch happened to perform better than Dwayne Bacon. Seeing the 4.5% drafted was the gamble and it worked!

whee I get some of my money back!

It is also worth noting that the several people that bet with identical drafts (and tied) ended up with $12.50 so these 50/50 bets on single games might not be advisable for people with lots of information on players as there are so few variations that amateurs like me can pick “reasonable” drafts.

The distribution of placement also ended up similar as the first contest (I performed better in “low risk” games).

Beginner Games:

Non-Beginner Games:

Conclusion

I still have some money in FanDuel and will likely try the same strategy to either meet more withdrawable money or swift defeat. I had some fun trying to gamble though I don’t really have time or the energy to investigate fellow gambler’s positions.

I think the most interesting part of the whole experience is how much the “news” influences if you should draft/remove a player due to injury. Most of the numbers on both DraftKings and FanDuel (like points-per-game) don’t take this data into account when pricing the player for the draft (which is how I drafted a player with an injury). Getting that information would give you a pretty big edge in the bet and the only way to do that would be to show up in person or have some other contact for information. This is reminiscent of one episode of “Chat with Traders,” a podcast with interviews of stock traders. In one episode, one trader hired someone on TaskRabbit to take their RV to the airport to watch if a companies private jet took off as a buy signal for some stock. That same sort of information flow exists for sports betting and could provide a real edge in the market.

I will say that the last 50/50 bet was far more “exciting” than all of the previous bets. I feverishly tried to find the cheapest way to get coverage of the game. I figured that AM/FM radio stations would be a good place to start (so I could walk off the stress) so I downloaded both TuneIn radio and IHeartRadio. TuneIn was very difficult to use and I couldn’t easily search by geography. IHeartRadio has a zip code feature and I set my “interest” as Sports so I immediately found the the channels that would have had the game. Unfortunately, there was a football game at the same time so I wasn’t able to get radio coverage and resorted to checking the ESPN mobile app every so often.

I would recommend fantasy sports betting to anyone with a wide breadth of knowledge of a whole sport league (specifically, multiple teams + players). I think some people have this knowledge but it will take me too long to ramp up and the payouts likely aren’t worth the time spent learning and keeping up.