I've been a huge fantasy sports fan since I was a kid. I say "fan" because fantasy sports are an entertainment vehicle for me. I love sports and I've traditionally excelled in math - and so yes - I've dreamed of being that data-driven General Manager who's athletic prime had passed way back when I was in 8th grade. In being more realistic, I very much enjoy having my handful of fantasy sports leagues to quench some competitive desires.
The daily fantasy hype is something I've followed since the beginning. Between the tens of millions of dollars being spent on advertising by two companies and the PR nightmare of a few weeks back, it got me thinking about the industry and it's future.
First things first -- I have no idea about the legality of the practice. I can tell you that it is a game of skill over the long-haul, however, so is poker and so is sports gambling. The "professionals" in all 3 of these practices have proven track records of not relying on chance. If "game of skill" is all that's needed to make it legal -- then DFS, Poker, and Sports Gambling should all be legal.
So let's just assume that DFS passes all if it's legal noise. The question I have is: How long (or how much) are "Avg. Joe's" going to participate once they realize they are playing an un-winnable game in the long-term? Their $20 to win $1MM dreams are being crushed by hundreds of professionals with sophisticated algorithms spending over $2000 to win that $1MM. The large marketing efforts needed to replenish the pools of "Avg Joe's" who are in it for the short ride are just not sustainable. I play DFS as pure entertainment, yet it's not as enjoyable when I'm being hustled, which is why I'm not a heavy DFS player. What IS enjoyable is avoiding the sharks and playing amongst my friends...Just like a home poker game.
So here's my advice. Diversify from merely trying to be "the casino" into so much more: licensed technology, media company, finance institution, etc. Stop spending all of your VC money on those annoying ads (that need to think about FREQUENCY limits).
Here's an idea example: Either open up your sites for 3rd party development OR create "Private/custom season-long DFS contests" yourself. By having this approach, you take the place of CBS,ESPN,YHOO as the service provider of choice. I'm a willing commissioner in general - but the amount of work needed to run a season-long DFS league is unreasonable for anyone. I love standard fantasy leagues - but the season-long aspect is what I like to call "experienced luck." It's hard to brag/talk trash in traditional fantasy sports these days because it truly does come down to luck (after a certain amount of baseline skill). DFS is skill on a season-long basis and it's something I'd be very interested in if the tools existed to do this. (Here's a free idea: What about SURVIVOR POOL MEETS DFS - you can only each player once in a season - woah! - right?)
In general - I'm very interested to seeing what happens in the DFS space and I'm rooting for the industry to innovate and just hope the companies leading here aren't satisfied with the status quo.