There are tons of people popping up that sell lineups on Twitter (similar to stock picking 'schemes', split your audience and keep selling to the ones that you gave good picks). There are paid analytics tools like the one in the article (and others endorsed nearly every other top 10 player). You can buy projections built on someone's machine learning model, or the aggregate of 50 top fantasy analysts. For a few bucks, you can get an Excel addon to optimize your lineups and script enter them for you. There are "group pools" that stake players to enter high-limit contests.
Take every business idea or angle from stock trading and online poker and they either exist already or will be released before next NFL season for DFS.
Funny I came across this line recently, in an article about trading terminals like the ones manufactured by Bloomberg etc. Maybe this guy's company is offering something to that effect - A glorified Data visualization software? (edit: Bloomberg's offering probably has much more value) It's a pretty smart move.
The fact he's investing his time in building tools for others rather than putting all his time into winning on his own, raises doubts about his actual winnings.
One explanation might be that he's maxed out how much he can win.
Another, perhaps more cynical explanation, is that he's actually being paid by one or more Fantasy Sports companies to help promote the notion that playing is a skill based activity rather than a gambling activity. Since the latter gets you banned in NYC :-)
I'm not from the US, so didn't know that, but it is stupid. Gambling and game of skill are not mutually exclusive. Gambling means that there is some variance, some risk involved. You gamble on the outcome. That doesn't mean you cannot develop a skillset which will make taking the risk profitable, over the long term. Any law that says otherwise is ill-written.
By that definition, every action you undertake is gambling. Driving to the grocery store is gambling. But since regulating driving your car to the shop under "gambling" laws doesn't make sense, "gambling" as a legal concept involves wagering money on games of chance, and "games of chance" is a distinct concept which is separated from "games of skill". This is the line that DFS is trying to walk, because the skill side of the line is the side that lets them operate in places where gambling is more strictly regulated.
Like I said, any law that insists on making a mutual distinction between games of skill and gambling (risking money on a probability of an outcome) is ill-written.
Poker is a game of skill just like backgammon. You can wager money and there is risk (chance) involved, but you can develop skills which will ensure that you are a winner over a less skilled opponent. Just like golf. There is always the chance that you will not make the necessary strikes and a less skilled opponent takes a game from you, but over the long run, you can sufficiently influence the outcome and achieve a positive win rate. This is what makes it a skill-based game. You influence it by your skills. You can place wagers and gamble on the outcome, but that doesn't suddenly make it any less not a game of skill.
I'm not very familiar with fantasy sports, but to the best of my knowledge, the same holds true there too.
A game of chance cannot be distinguished from games of skill. All games involve chance. This problem probably arises from the poor understanding of "chance" and probabilities by the people who wrote the law (presuming Hanlon's razor here). They wanted to ban games where the operator bleeds the players dry, like slots, lottery, etc., and called them "game of chance", but there is more to the story of "chance", like i outlined above.
Actually, I think your argument rests on a poor understanding of the laws you are criticizing, as you presume incorrectly that they rely on definitions of "game of chance" and "game of skill" such that the former must have no element of skill and the latter no element of chance.
The definitions are different in each case, but none of them work that way. In New York, for instance, the outcome depending materially on chance, whether or not skill is also involved, makes it a game of chance.
I think you may misunderstand the purpose of the gambling laws here. Do you have a citation for their purpose as a consumer-protection measure?
Given the government's heavy use of lotteries and other gambling as a cash source, the laws appear to be designed by lawmakers with a solid understanding of chance and probability and a desire to ensure that monetary gambling (with gambling defined as "an activity where the influence of chance outweighs the benefits of skill, for most participants") be restricted to the state, not commercial entities.
It might very well be the case. I'm not sure about their motives, I even said so. I don't see how that affects the poorly written definition and the case that poker and fantasy sports are games of skill.
The relevant point being that not everybody believes they're a "game of skill" in the "skill vs. chance" slider which is relevant to the law. While there's no question that like every game, user actions (skill) can impact the outcome, how much it can impact the outcome is what determines whether something is classified as a game of skill or chance. Perhaps it's more clear if we say "a game of primarily skill" or "primarily chance".
If daily fantasy sports is primarily skill-based, they can do it. If it's primarily chance-based, it's illegal in the US. Which is why they're pushing for it to be referred to as "skill-based".
Some laws use a predominance test; New York law, which seems to be the main focus, does not -- it uses material element of chance standard, which can apply even when a game is primarily skill-based.
Beating the point spread wagering on NFL games is also a game of skill then. There are some sports betters who are better at analyzing data than the bookies are who consistently make money.
Very few games that we'd call gambling (e.g. blackjack) are 100% chance though. Maybe dice games? Lotteries? Even in games where the house always has edge, you can lose less by playing optimally.
But this is also true for playing the stock market.
Indeed, the stock market and fantasy sites are extremely similar, with the same fundamental issue -- a small number of people with a technical and information advantage are essentially skimming the table clean of the entry fees of a lot of people picking randomly or emotionally.
It's not really like the stock market since with stocks the majority of players "win" when measured over a sufficiently long time scale. A better analogy would be playing the derivatives market, which is zero sum (minus broker fees).
Create a competitive advantage and use it while you can. Then when it's no longer an advantage sell it to the masses and show them the pile of cash you made with it.
Another explanation might be that he wants to get everyone else playing the set of lineups his algorithm is spitting out. In GPP (guaranteed prize pool) tournaments, there are usually very large fields and the prize structures are heavily weighted toward a tiny pool of top finishers. The key to winning these tournaments isn't necessarily picking the lineup with the most expected fantasy points, but rather having lineups that very few others have, because you are looking for an extreme result that is different from that of your competition. GPPs are won much more through application of game theory than they are through any analysis of the specific games or players.
If he gets a large percentage of the DFS player pool to play his algorithm's lineups and he goes a different direction, he'll crush the GPPs.
I'm not a game theorists or anything but you don't win by having a different team, you win by having a different team that also does well.
If his software is telling people to pick XYZ great lineup, he has to come up with a better lineup otherwise they all share the prize and he gets nothing.
He doesn't need to come up with a better lineup. An inferior lineup with a higher payout could lead to a fighter expected value. For example, if he has a lineup that wins 1/5 the times the best lineup does but pays out 10 times as much he would double his returns.
It matters to some degree which players he picks, but in the case of GPPs it matters much more that the lineup is unique. There are lots of lineups that have nearly the same expectation.
It does seem like one of those real-estate folks selling their "three step system for creating wealth flipping homes" who probably make more selling the system then actually flipping houses. In this case where he'd be giving folks the software they need to beat him and if these software systems do work they'd eventually just flood the market and make the whole point moot.
That being said the whole industry is under siege. He may just be trying to make as much as he can before it officially becomes gambling or automated play becomes illegal.
He's also involved in multiple lawsuits stemming from the fact that he has an "unfair advantage" from using his software.
If he makes it available to everyone he will still be making money if the courts don't rule in his favor... Plus fantasy sports are huge right now. I'd say with his track record he has the potential to make a very profitable startup.
He also had to pony up $24k to submit 888 lineups on the day he won $221k, so I'd say he's doing all right.
According to the article, he's coming under legal pressure from various sides who want to stop people from doing this sort of thing. That sounds like an excellent time to shift gears to me.
I have to disagree. I am not too familiar with the world of DFS, but I am with online poker. I understand many heavy hitters from poker transitioned into DFS a few years ago.
There clearly is a need for better information, tools, and software for DFS players to make their decisions. Whether this will hurt his winnings by making his competition smarter is another issue. Can't find fault in him by branching out to another stream of revenue.
He probably does it for the same reason we program and tell the world about it on HackerNews - accolades. People are partly driven by peer approval.
Another thing is that this type of job, relying on gambling for a living, can be prone to huge swings in wins and losses. So people look for ways to soften the blows with stable income.
Because even if you have an edge at a game of skill and chance, it's not a license to print money. Professional blackjack players have to fly under the radar, and even with the large bankroll needed to survive swings, can only expect to make somewhere in the 5 figures. Plus, you have to spend all your time playing blackjack. Wouldn't you rather sell a book?
Playing blackjack is really, really, really boring (really!). There's a reason professional gamblers call it a 'grind'.
There are mathematical systems to beat blackjack (counting cards, change your bets when the odds are in/out of your favor). Are you doubting this?
The number of people that are going to successfully read the book, count cards, and beat the author are few to zero. The number that will buy the book? Many. Heck, I've read poker books, but don't play poker. It's interesting to learn algorithms, reasoning, and also to consider the psychological elements.
As an aside, blackjack is beatable if you count cards. The books are not bogus (not sure if you are implying that or not).
In addition, with the attention fantasy sports has been getting, his competition is probably stepping it up a bit. It may be easier to beat everyone's uncles than to best teams of people who are also using statistics/machine learning/sports analytics.
I was thinking about this. You beat me to it. Great video basically showing those are gambling sites and the only people who make it big are mathematicians with tons of spreadsheet and custom R scripts.
I built a system that scraped projections off http://apps.fantasyfootballanalytics.net/projections and joined them with weekly salary information from DraftKings. I then ran that data through a genetic algorithm that maximized projected fantasy points while keeping the team salary under the limit.
I entered about 10 matches ... and I lost every single match.
I don't know if my projection data was bad, my sample size too small, or if I was just unlucky. I gave up after a few weeks.
Your sample size is too small and I don't think you put in enough effort into your algorithm. Projections can be used as the base of your own calculations but you need to do more. Look at other things like matchups and player matchups, and look out for value picks.
Based on my own experience, I've seen some absolute monsters enter with $10K and come home with $200K+ in a single weekend. These players create hundreds of different lineups each week and enter them in the big contests.
I scraped from about 6 different sites - went through millions of combinations and only did so-so. I think it's simple - the people that win play A LOT of rosters to cover their bases. That seems to be what the person in the story is doing and what I've read other big players are doing.
I'm curious if there is a way to scrape the historical roster data, so one could figure out how much variance the other players are getting. On FanDuel you can browse through the other rosters by hand, but the API doesn't appear to let you scrape the entire contest.
I'm curious, which sites did you scrape? Also by "so-so" do you mean that a simple majority of picks were winning? Modest winnings in DraftKings (or their competitors) could make for an interesting side-hustle or semi-passive income source.
I did a similar thing, with the same data. I created a maximizing team, and then some nearby teams. I'm doing slightly net positive (I've turned $200 into a whopping $229.) At this point. I really can't say if this is chance or indicating an advantage
Since you asked : I've never billed an hour for my programming, so technically zero. I did spend dozens of hours, as I was starting from scratch skills-wise and using this as project to try and build some data science chops. I learned how to use pandas, xgboost, (I also wrote my own NBA projection app in the process) and a lot about optimizing performance in python. So well worth it. Tbh, I'm glad you asked because I had assumed that this was something a more experienced programmer would have been able to do before breakfast. Don't worry, though, my accountant will see to it that a minimum of that $29 is taxed.
I'd like to see someone describe how to do this in practice. Maximizing variance doesn't do you much if your high end doesn't beat the others, especially if you don't know how high you have shoot. If you overlap two candidate probability distributions and know what you have to beat in order to win, you can make a choice. In my dabblings in FanDuel, I've tried to maximize the expected value, and found that this produced surprisingly wild results - I've jumped from the 99 percentile one week to the .1 percentile the next.
The juice in DFS is ridiculous but the player pool is full of really bad players. As soon as the player pool gets a bit better the edges get too small in my opinion.
I have no access to DFS as I'm in Europe once I do I'll probably adapt my dynasty FF points predictor to it for fun :)
Good time to switch to selling the software if you anticipate the edges to get smaller. Quite similar to the poker world where people that used to win big sell coaching at high rates and quite often people figure out that those coaches don't beat the games anymore etc.
As the top ranked player, selling his "methods" could be more lucrative than his competition earnings. If the he considers the barrier to be sufficiently low, then he would expect his earnings to drop with time. There are ways of looking at it that make his decision rational.
If you have high earnings in a market that you think has a low barrier of entry, you can expect worthy competitors to show up.
If you are the worthy competitor (No. 2) but maybe just cannot dethrone the number one, then you could decide to sell methods that make you a worthy competitor.
When more worthy competitors join because the No. 2 guy decided sell his secrets, top guy makes even less as the each participant's winnings are drawn from the pool. In this case profit margin is proportional to the difference in skill.
If you are the top guy, you could look on as the No. 2 guy establishes a solutions market (as your profits drop) or you could start the solutions market.
It seems like if you are the top guy, the main consideration is
How special/unique is my secret sauce? The answer to that and guides the second, When is the right time to become a solutions provider?
There will be market saturation with either your product or that of another entity. With time the game approaches to pure gambling and the money paid for the solutions becomes a Vig of sorts! Along the way sales would drop according.
Not sure what kind of a privacy policy his software will have, but I imagine the aggregate data of thousands of people using his software (if he has access to it) might be even better than just using it by himself.
That would be very smart, evil, but smart. He could identify strategies superior to his own and then either play them himself or feed them back into the product and charge for premium features.
They also reduce his potential exposure. If he is really making money gambling, those earnings are profits from something that is most likely a criminal enterprise.
When bookies get shut down, the customers don't get their money back.
I think this is less an argument for how much skill is involved in DFS - there is, but how slim the chances are for recreation players to win against the pros. This seems like a scam for recs who stand no chance.
Probably the better comparison would be how likely an amateur is to win against the world backgammon champion. Backgammon has some luck in it with dice rolls, but if the skill difference is big enough luck has a much tougher time making any difference.
There are tons of people popping up that sell lineups on Twitter (similar to stock picking 'schemes', split your audience and keep selling to the ones that you gave good picks). There are paid analytics tools like the one in the article (and others endorsed nearly every other top 10 player). You can buy projections built on someone's machine learning model, or the aggregate of 50 top fantasy analysts. For a few bucks, you can get an Excel addon to optimize your lineups and script enter them for you. There are "group pools" that stake players to enter high-limit contests.
Take every business idea or angle from stock trading and online poker and they either exist already or will be released before next NFL season for DFS.