What are Daily Fantasy Sports (DFS)?
If you’re a fan of any of the major American sports leagues (NFL, MLB, NBA, NHL, and even College Football), you’ve likely been peppered with advertisements from sites like FanDuel and DraftKings talking about daily fantasy sports (DFS) and how you can win big and in a short time. Cherry-picked testimonials highlight players who have won millions after only investing a few bucks. Is this real? Is it legal? And can you turn a profit playing daily fantasy sports? The answers may surprise you.
What Is DFS?
Typical fantasy sports leagues span over an entire season and can be either free or with a buy-in. You draft your players, make trades, add free agents, set weekly lineups, and hope for a little luck en route to a championship. In daily fantasy (which isn’t necessarily always daily), the whole process is accelerated. Rather than have a game last over an entire season, every day (or week, depending on the sport) serves as its “own” season, meaning you can win faster and play another game sooner.
How is it played?
While not true of all DFS sites (but true of the major ones, like FanDuel, DraftKings, and Yahoo!), a key component of the game is a salary cap. This isn’t a unique concept—season-long fantasy sports have also offered a salary cap game in the past that allowed you to choose any players you wanted, so long as they fit within the cap. For each game, you’re allotted a certain budget (and your competitors are given the same). Players are assigned a dollar amount, and athletes expected to perform better are generally priced higher. The challenge, then, is identifying which players will offer value given their price. For example, everyone knows Rob Gronkowski is the best tight end in fantasy, but he’s also priced accordingly, so it’ll be up to you to decide if he’s worth that premium.
Millions of Dollars? That Can’t Be Real, Right?
Most sites offer several different formats of games, and when people talk about winning huge amounts (literally millions), they’re talking specifically about Guaranteed Prize Pool (GPP) tournaments, where a massive sum (e.g., $1,000,000) is guaranteed to the first-place winner. Prizes are usually credited on the site the same day or the next day, and you can withdraw your winnings at any time. Winning those weekly grand prizes takes skill and a lot of luck, but it’s not a scam by any means. If you’re looking for something a little lower stakes (and easier to win), there are also game formats like double-up, triple-up, and 50/50 that pay out the same amount to all players above a certain threshold. Though there’s no life-changing prize up for grabs, if slow and steady is more your style, the odds in these games are a lot more favorable to your success.
Isn’t This Gambling? Is Daily Fantasy Even Legal?
Though disallowed in a few states, daily fantasy sports are legal in most of the U.S. They differ from typical sports betting in that they have been categorized as “games of skill”, largely because you have to choose a lineup with certain constraints, not just pick a team with Vegas-defined odds and go. The case for DFS is likely strengthened by the fact that fantasy sports (and paid leagues) have existed for a long time, and season-long games have already passed scrutiny, thereby clearing the way for the “daily” adaptation of the same idea.
Your winnings from playing DFS are taxable, so if you do strike it rich, just remember that Uncle Sam expects his share.
Get in the Game!
There are three major sites right now for daily fantasy sports, and of all the sports, the NFL is easily the most popular among players. FanDuel, DraftKings, and Yahoo! all offer matching deposits for first-time players, and each offers multiple game types, from low-yield 50/50 games to larger GPP $1,000,000 contests. Each has its unique scoring and player pricing systems, so you’ll want to take a look at each and see which game suits your knowledge and personal preferences. See more about each site using the links below.