We’re living in the golden age of fantasy sports and companies like DraftKings, based in Boston, and FanDuel are reaping the benefits.
The relatively new companies target a specific segment of fantasy sports players, those who want action each and every day. For instance, in regular fantasy baseball leagues, owners draft their teams prior to the start of the season and the only way they can add or dump players on their roster throughout the season is through trades or through the waiver wire. In the world of daily fantasy, owners can draft entirely new teams each and every night. Got a hunch David Ortiz is going to go 4-for-4 at the plate tonight? Draft him, and hope that others don’t.
The daily fantasy industry is growing rapidly and along the way it is also making millionaires out of some of their more skilled – or lucky – owners. Denver native Peter Jennings quit his job at Charles Schwab in 2011 in order to focus on daily fantasy sports full-time. It paid off. Jennings won $1 million in a DraftKings tournament this past August and had won hundreds of thousands of dollars prior to that.
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“I realized that playing daily fantasy was becoming more lucrative than my day job,” Jennings told Metro. “I was a poker player throughout college and I was playing regular fantasy sports for a while, but the day I found out about daily fantasy, it was a euphoric experience.”
Jennings and the big two companies insist that those who win big aren’t just gamblers on a hot streak. They call it a “game of skill,” and say that most everyone who has become wealthy playing daily fantasy analyzes sports statistics for hours upon hours each day.
“It’s much like trading on the stock market, except you’re buying individual players,” Jennings said. “I’ve played hundreds of thousands of [daily fantasy] games. I’m confident it’s a game of skill. It’s definitely a game of skill. It’s very data-driven. You’re always crunching numbers and it’s very hard to be a good player.”
Gambling on sports online was outlawed in the United States in 2006 due to that year’s Unlawful Internet Gambling Enforcement Act. But the act excluded fantasy sports that meet specific requirements. FanDuel began its site in 2009. DraftKings popped up in 2012.
“We really saw an explosion in the industry in 2012,” DraftKings’ VP of communications Femi Wasserman told Metro. “It was really organic at first. The growth, initially, was due to word of mouth - friends telling friends.”
Investors soon caught on, pumping in millions. Today, DraftKings has over one million active users and over $100 million will be awarded in the 2014 football season alone. DraftKings also entered a professional partnership with the New England Patriots just last week, the first marketing deal of its kind.
Cynics will say that the good times won’t last forever, regulators will eventually catch up and the loophole in the 2006 act will eventually close.
“We don’t even consider it a loophole. That’s a matter of debate, a subjective argument,” Wasserman said. “We don’t stay up at night worrying about regulators eventually ‘catching up.’ We’re planning on being here. We view ourselves as a start-up and we’re on a typical start-up curve. We believe that what we do is legal and we believe that our customers love fantasy sports, first and foremost.”
Maybe quit your day job?
A minimum balance at DraftKings is $5 but $25 - $2,000 is recommended.
When asked by Metro to give advice to anyone contemplating quitting their day job in favor of becoming a daily fantasy sports pro, Jennings didn't exactly offer up words of discouragement.
"I would say, just make sure you have a track record of doing well for a period of time," Jennings said. "Set aside living expenses, and don't get too high with the big wins and don't get too stressed out about the big losses.
For those wondering, Jennings still plays daily fantasy and doesn't expect to get a "regular job" for quite a while.
What the law says
The Unlawful Internet Gambling and Enforcement Act of 2006 exempts “any participation in a fantasy or simulation sports game, an educational game, or a contest, that…has an outcome that reflects the relative knowledge of the participants, or their skill at physical reaction or physical manipulation (but not chance), and, in the case of a fantasy or simulation sports game, has an outcome that is determined predominantly by accumulated statistical results of sporting events, including any nonparticipant's individual performances in such sporting events.”