This week we take a break from the normal hardcore data mining DFS regimen and take a look at the daily fantasy sports industry as a whole. There has been a lot of talk in the industry about how to improve things and I take my own stab at that topic in this week's column. While some of the biggest prizes being awarded by the daily fantasy sports sites are growing 10x in a calendar year, the amount of people playing is not growing at the same pace. Having spent the better part of the last three years working behind the scenes for daily fantasy sports websites, I have more of an insider look at the topic and how the DFS sites can help grow the industry.
Rewarding Free Play
One of the best ways to get people to try daily fantasy sports is to reward free play. Most sites run freerolls at the beginning of the season, but this isn’t an optimal experience for a new player because they’re going against thousands of other players and only a small percent of the field gets paid.
My idea is allow players to enter up to 10 heads up contests in a given day and issue reward points for each win. The reward points can then be converted into an entry into a cash contest. Issuing an expiration date on these reward points will also force people to use them in a faster time frame. By introducing new players to heads-up action first, they’ll be more likely to play in those contests after they make a deposit. The industry needs to put more of an emphasis on heads-up action.
Easier Contest Formats
One of the biggest issues with daily fantasy sports is the amount of research required. The average player with a full-time job and family does not have enough time to do research and then sit by the computer or mobile phone for the final hour before first pitch to confirm lineups. By offering contests with no salary caps, no position requirements, and smaller rosters, you open up daily fantasy sports to the casual fan who wants to play, but might not have the time to do the research for full blown salary cap games.
By adding a simplified salary cap style game, this will introduce the contest to a new audience without feeling intimidating. An example would be a daily fantasy baseball contest that has two starting pitchers and five hitters, but the hitters are only the top-tier players. You can give each player in the pool a point value by tier that works like a salary cap, which gives some level of strategy without simplifying it too much. This worked great in the Madden NFL Facebook game, where you picked one player at each position (QB, RB, WR, TE, IDP) from a group of five players who each had a point value from 1-5 and there was a roster cap of 15 points.
One of the best things about playing a season long fantasy sport on different sites is that the scoring systems are often very similar. This isn’t the case in daily fantasy sports as there’s a tremendous difference between salaries, rosters, positions, and scoring across the industry. By removing some of the lesser scoring categories, this will help streamline the scoring that new players will have to take into consideration. Just counting total bases for hitters as +1 point and innings/strikeouts as +1 point for pitchers would be an example of a scoring system for beginner players.
Protecting the Ecosystem
This is probably the hottest topic in the industry and rightfully so. In order for the industry to grow healthy new players need to be participating. If a new player comes in and loses all their money to a more experienced player, the new user will have a negative experience and potentially never come back. In poker, you had this done because of the table limits like $1-$2 or $10-$20. It was not worth it for a higher stakes player to jump into the “kiddie pool”. But with DFS, its just one click of a button now to enter as many contests as you want regardless of the amount.
By segmenting players into tiers and making it public, this will at least allow new players to decide if they want to play versus players of the same level or jump up and play against more experienced competition. Offering an incentive to players in heads-up contests is one way to increase the level of action.
Improving Tournament Structure
Currently most of the sites are only paying out 10-15 percent of the field in large tournaments. While new players come in and get excited about a first-place prize of $1,000+ or a $20,000 prize pool, the fact is 85-90 percent of the field is going to have a negative experience and many new users will fall into that category, which isn’t the best for the industry. While there’s a place for these contests, there should also be a consideration of running tournaments that pay at least 20-30 percent of the field, so that the first-place prize is still substantial, but more players end up with a positive experience. Also, by having tournaments with smaller fields, this introduces new players to the contest type in a more approachable way.
Another issue of tournaments is the amount of entries that is allowed per user. It is understandable that in a large field qualifier contest, the sites need to get as many entries in to reduce risk, but in a regular guaranteed prize pool tournament, there needs to be some reasonable level (5-10 entries max) of restriction on the number of entries allowed per person. Even though this will result in lesser prize pools offered, overall this is better for the health of the industry and will create a more level playing field. In addition, single-entry contests need to be more prevalent in the industry which will reward the skill more instead of seeing players just throwing in multiple entries by stacking due to overlay.
Season Long Contests
95 percent of fantasy sports players still play season long because they can draft, manage their teams each week with limited commitment, and enjoy the entire season for a single payment. This format can be brought over with the daily/weekly salary cap format and be a great addition to the industry. In football, it’s very easy -- you can run season long leagues, where each week you have to submit a roster built off the current week’s salary cap. Now in other sports like baseball and basketball it would be impossible to ask people to play season long by putting in a new team every day.
But I think there’s a format that would be appealing to players that would be a weekly head-to-head format where you submit your lineup on Sunday for the upcoming week. It would be based on the salary cap, and have expanded rosters with a best ball scoring format. You could pick 12 hitters and the top 10 would count, and you could pick six starting pitchers, with the top four counting towards your total score. This could also bring in closers and middle relief pitchers that have zero value in a daily baseball format.
I mentioned earlier that I have been a part of several daily fantasy sports websites helping them with consulting about product offerings, etc., and one of them had a level of gamification that was enjoyed by a huge part of the audience. The site was Daily Joust and we awarded players with “Badges” whenever they achieved a certain task. It brought over a piece of social gaming that was missing in the industry and an interaction that is currently missing in today's daily fantasy sports landscape. I would like to see this brought back by one of the major sites as a way to bring in new players into the industry and make it fun. People would log in every day on Daily Joust just to see what badges they earned the night before. Each month, there were special tournaments that were only for people who earned a certain number of badges. The games became more about the competition and not just about how much money you won.