In the past year, I’ve seen a lot of analogies for daily fantasy sports. The industry, and some writers, have sought to tell us “what DFS is like,” in terms of defining it as a game of skill, or as a non-gambling product.
Some are pretty decent comparison points, while others strain credulity. The analogy game has only ramped up in the past few months, with public relations experts and lawyers for DraftKings and FanDuel saying DFS is like just about everything under the sun.
Here is a sampling of what I’ve heard and read, and my thoughts on the comparisons.
A bowling alley/league/tournament
How the analogy works: This has been brought up nearly every time industry lobbyists appeared in front of a legislative committee in 2015. The analogy has a lot of merit to it, on the surface. The DFS sites, in this analogy, are the “bowling alley”; they stage competitions and take an entry fee for allowing you to bowl at the facility, and for administering the event. The DFS contests, themselves, are the “bowling tournaments.”
Why it’s not a good comp: The biggest issue? It’s a matter of scale. There are bowling tournaments where you can win thousands of dollars at the local and regional levels, but most local events are not for big money. Pros at the top of the sport aren’t paying entry fees in exchange for potential larger payouts. Billions of dollars are paid out in entry-fee DFS contests.
The bowling tournament analogy — like many of the analogies you’ll see below — also hinges on some matters of belief or opinion.
For instance, in a bowling tournament, you’re actually throwing bowling balls down a lane. In a fantasy contest, you’re selecting people who are actually playing a sport. (To take it a step further, if there is fantasy bowling — and I am guessing it exists — you would be picking bowlers doing some actual bowling.)
Are you the “actual contestant” in a game of skill, or are you just putting down money on what you think bowlers will do? DraftKings and FanDuel, in legal arguments in New York and Illinois, assert that under state law, DFS players are the actual contestants. To the layman, this probably sounds like a specious argument, but there’s certainly a chance it could hold up in court.
There’s also the matter of how much skill is involved. A recreational bowler — someone who plays a few times a month while having some beers and is happy to break 100 — who enters a bowling tournament will likely never win said bowling tournament. A recreational DFS player who isn’t that skilled can get lucky, hit upon a good lineup and possibly win millions of dollars.
In the long-term, however, both good bowlers and DFS players will make money in their respective endeavors.
A spelling bee
How the analogy works: In spelling bees, you do a lot of studying so that you do well when the spelling bee is held. In DFS, the more studying and research you do, the better you will do in the long run.
This one has been offered up by FanDuel CEO Nigel Eccles.
Why it doesn’t work: This one’s pretty easy. I’ve never heard of a spelling bee where you pay an entry fee to win prizes, although maybe it happens at some pubs, like a trivia night. Still, a spelling bee is not a good comp.
Also, again, someone who doesn’t study spelling is never going to win a spelling bee. You don’t have to study DFS until your eyes go red to get lucky and win in the short term.
Finally, spelling bees are almost entirely in the domain of children. DFS sites limit play to only those 18 years of age and older.
The stock market
How the analogy works: This one is probably the best DFS comp you’ll ever find outside of things that are generally considered to be gambling. In the stock market, you do research, analyze trends and buy stocks based on the idea that they will make you money over time.
To make the analogy for DFS work, just replace “companies” with “athletes.” As a DFS player, you analyze data and try to find players who represent good value and will give you a return on your investment (aka entry fee).
Why it doesn’t work: The logistics of the analogy work just fine. However, the stock market is regulated by government; DFS is not. Also, because stock trading is a lot like gambling, it’s actually exempted from gaming law in many states.
Also, when you buy a stock, you actually own a part of a company. You don’t own a part of an athlete when you enter a DFS lineup.
Finally, stock trading is considered a zero- or positive-sum game, while gambling (or something where rake is taken) is not.
How the analogy works: Chess is a game of skill; DFS is a game of skill. DraftKings CEO Jason Robins likes to invoke this analogy.
Why it doesn’t work: I’ve touched on this comp before. Again, it’s a matter of degree, and also scale, in the comparison:
- A grandmaster will never lose a chess match to an amateur player; the same cannot be said in DFS.
- Also, like bowling or other skill contests, not many people are getting rich playing chess tournaments with entry fees.
Predicting the weather
How the analogy works: This was a new one brought up by USA Today. Meteorologists compile data to try to create accurate models of what will happen in real life. This is very similar to what skilled DFS players do.
Why it doesn’t work: Weathermen aren’t wagering money on the outcome of their predictions. Well, maybe they lose their job, if they do a poor job of forecasting the weather. To wit:
Some on social media pointed out to me that predicting the weather can be a big part of futures trading. But that’s a fairly large intellectual leap to make weather prediction a comp for DFS.
Going to the movies
How the analogy works: This is another one from DraftKings’ CEO.
The comp works at this level: Both are entertainment products. Going to the movies is fun; DFS is also fun. There’s absolutely no issue with the comp there.
Why it doesn’t work: You don’t have a chance of winning money every time you go to the movies.
Can DFS exist in an environment where you aren’t paying money to win more money? Sure; DFS even exists today, in that form, to a certain extent. To the scale it exists currently? No.
For instance, lots of people spend a good deal of time researching and agonizing over their seasonlong teams, when there are relatively small amounts of money on the line, or even just bragging rights with friends.
But right now, most of the “fun” in DFS — at least in the version offered by DraftKings and FanDuel — is mostly tied up in the amount of money you can win. DFS users watch games to see how their fantasy teams do — to see if they win money.
John Oliver probably put it best in his segment looking at the DFS industry on HBO. “Do you know what else is an entertainment product? Gambling.”