Daily fantasy sports (DFS) operator FanDuel did something unprecedented and quite unusual last week, announcing a tournament that paid out only in Bitcoin.
The event, which cost only $3 to enter, paid out a total of 3 Bitcoin as prizes – an approximate prizepool of $45,000 at the time the tournament ran. The winner, captaincavemanbro, got 2 Bitcoin for first place, while second place got half a Bitcoin and 3rd and 4th each got 1/4 Bitcoin.
While the tournament put an interesting concept on display, offering cryptocurrency prizes in a cash buy in event, there were deep concerns in the player community about what was essentially an uncapped field, and how that resulted in an unbelievably high house cut.
Still, this type of tournament must have shown promise from FanDuel’s perspective, and will likely be a taste of what players can expect in the future from what was once the largest DFS site.
Cryptocurrency and gamblers: a perfect match
Cryptocurrencies, especially the ubiquitous Bitcoin, have been highly popular in the gambling community. After all, this is a community conditioned to highly volatile bets and, in the case of online gamblers, disruptive technology.
Professionals and wannabes alike are more willing than the average person to risk significant sums of money when large returns are possible. In the case of crypto, those bets paid off in a big way in 2017.
Now Bitcoin, Ripple, Ethereum and everything else you can imagine are filling up my Twitter feed on a daily basis. As people have recently found it much harder to make money playing poker or DFS, many have turned their attention to maximizing their returns on the blockchain.
This event was controversial in that unlike normal DFS tournaments, this one had an entry limit of 999,999, making it effectively uncapped.
Some DFS professionals and regulars took exception to this format, arguing that FanDuel was fleecing its customers, and the numbers backed up the assertion that the rake was hardly typical. The tournament had around 42,700 entries, taking in just over $128,000 in entry fees before paying out about $45,000 to the winners. In a typical tournament, the house takes 10-15%, but the Bitcoin Bowl ended up with a rake of around 65%.
With these odds, you’re probably better off playing the lottery.
…but do players care?
Professionals are likely to be turned off by such low payouts relative to the entry pool, but I’m not convinced casual players are quite so concerned. After all, the tournament did draw more than 40,000 entries and a six figure entry pool, making it an unequivocal success for the operator.
The answer to whether or not players care is likely that it depends on who you ask. For value-conscious players, it’s clearly a bad deal. But for many, it’s just a $3 shot at getting in on the amazing Bitcoin investment that everyone’s been talking about. Like those who play the lottery, sometimes it’s more about betting a small amount for a shot at a big prize than it is about calculated ROI.
One off or long term strategy?
It’s no secret in online gaming industry circles that FanDuel has had a tough couple of years. The former number one DFS operator has lost significant market share and seen two of its founders leave the company, including its original CEO Nigel Eccles. There have been rumors off and on for more than a year that the company was near insolvency, particularly since the merger between FanDuel and DraftKings was canceled.
It makes sense that FanDuel is experimenting, even if it seems unorthodox to industry observers and long time customers. They’re likely trying to crack the code for getting newbies’ rake while simultaneously taking high volume grinders out of the equation. This may be just the first of many times we see new, experimental formats on DFS sites, some of which may seem distasteful to regulars.
Fantasy Sports in New Jersey
New Jersey has long been one of the nation’s friendliest states for real money fantasy sports, and the Garden State cemented that status in 2017 by passing its own law clarifying the legality of DFS. The state also remains at the forefront of efforts to legalize sports betting.
NJ is also the pioneer state for a new variation of fantasy sports where players try to pick which athletes will have the best performances in a given day. Fastpick, as the game is known, is a partnership between SportAD and Resorts Casino.