Sports Biz: My foray Into fantasy sports
Hoping for big returns
When I was a kid first falling in love with sports, I spent countless hours in the backyard pretending I was one of my favorite players for the Denver Broncos or Chicago Cubs.
Last fall, I kept harkening back to those days as I conducted some personal research on the world of playing daily fantasy sports on the Internet. Instead of pretending to be wide receiver Rick Upchurch or shortstop Ivan de Jesus making diving catches, I was now the guy in the suit in the luxury box, peering down on the talent I had assembled, hoping for big returns.
If nothing else, I learned this much: It’s scary how easily one can fritter away hours trying to assemble the winning team.
The fantasy sports industry and the websites that make games available have exploded in recent years. Fantasy Sports Trade Association research indicates approximately 500,000 people were playing fantasy sports in the U.S. in 1988. In 2014, that number had grown to 41.5 million.
The FSTA also reports that the average fantasy sports player spends 8.67 hours per week managing his or her teams. It’s only logical to believe that a significant percentage of that is done on nine to five company time, leading to massive amounts of lost productivity in our economy.
In fact, last summer a Chicago-based consulting group estimated that fantasy football alone leads to $13 billion in lost productivity. That obviously doesn’t include other fantasy sports or another massive sports distraction – the men’s NCAA basketball tournament in March. And plenty of people play fantasy baseball, basketball, hockey, golf and NASCAR.
Fantasy sports basically work like this: You’re the owner who assembles a team of real players in the NFL, NBA, MLB or whatever sport through a draft or auction with other owners in your league. Each week you pick a team from your roster and play them against another owner hoping your players score more points in their real games than your opponent’s.
There are many variations on the rules from league to league, but fantasy scoring is essentially based on the actual statistics produced in real life games.
While most fantasy sports players or “owners” partake in leagues that take a whole season to determine winners and losers, more and more people are trying sites like FanDuel and Draft Kings in which there is no season-long commitment. You can join a one-day league for as little as a dollar or as much as several thousand dollars. You pick your team from players active in games that day, and you hope to score more than everyone else playing in that league at the same time.
Ron Kammerzell, deputy senior director of enforcement at Colorado Department of Revenue, said the Unlawful Internet Gambling Enforcement Act passed by Congress in 2006 made many forms of Internet-based gambling illegal but it omitted fantasy sports because it is perceived to have a level of skill in determining winners and losers and is not solely a game of chance.
Arizona, Iowa, Louisiana, Montana and Washington are restricted to playing in free contests on some sites – not necessarily by state laws, but because lawyers for those sites believe the laws in those states are not clear enough when it comes to online gaming, so companies could be deemed to be breaking state laws if they made their games available there.
Kammerzell said he is not aware of any current or past efforts to make it illegal for these fantasy sports sites to conduct business in Colorado.
So back to my experiment: I invested $25 early last fall in a site offering daily fantasy sports. My goal was to see how much I could win in relatively low-cost games (between $1 and $5). I was able to play dozens of contests for months on that investment, and on several occasions I came close to winning hundreds, even thousands of dollars playing fantasy football and basketball.
Over the course of four months, I easily spent more than 30 hours of my personal time hand-selecting my teams for different contests. I found myself with $25 in my account in early January and decided to risk it all in one league based on a weekend of NFL playoff games and more than 80,000 other entries.
I lost it all, but I was tantalizingly close to winning and not far from winning big. The experience made it easy to see why business is booming.