How the Daily Fantasy Sports Industry Turns Fans into Suckers
I always have to preface these opinions with &quot;I used to work in the industry&quot; (I was a developer for a site that got acquired by one of the 2 outfits mentioned), so take this with a grain of salt:<p>This guy was destined to be a sucker. It&#x27;s not that DFS turned him into a sucker, it&#x27;s that he has a gambling problem - he says this in the beginning of the article! Why do we need to read further, it&#x27;s pretty clear from that statement alone he&#x27;s not going to do well in the long run just knowing the psychology of a gambler like that.<p>And to be frank, he isn&#x27;t very smart with his money either. He&#x27;s doing a lot of things that are increasing his risks and destroying his bank account which could be fixed with some simple statistics and discipline (which, for someone with a gambling problem, would be almost impossible).<p>The way to not lose money like the author is employ many of the same tactics you would with investing:<p>* Put in only what you can afford&#x2F;feel comfortable losing<p>* Stick with the Kelly criterion[1] and never bet more than 10-20% a day<p>* Diversify - instead of 1 $20 H2H game like the author, play 10 $1 H2H games and 10 $1 50-50s. Now instead of flipping a coin once to make $40 all or nothing, you get to flip a coin 20 times, and each win gets you $2, which can mitigate some of your losses.<p>Now to be fair, that last example is a bit inaccurate - because each coin flip is not an independent flip like in a true coin flip, because if you use the same lineup, and that lineup performs poorly, it&#x27;s like having a weighted coin severely against your favor, but at least with H2H matchups, you know that some people can bomb worse than you, whereas in 50-50s, since you only have to do better than half, in a large sample size, you likely won&#x27;t win any of your 50-50s since the median score is roughly the same across all of them.<p>My point is two-fold:<p>1. DFS doesn&#x27;t turn people into suckers, they already were suckers&#x2F;gamblers and didn&#x27;t do their homework and practice discipline, which brings me to my next point...<p>2. DFS <i>is</i> a game of skill - for an exaggerated example, it takes a basic level of competence to choose Tom Brady over his backup, Jimmy Garoppolo. You can be almost certain he will play, as he&#x27;s pretty much played every game in his career except for an injury nearly a decade ago. But DFS is <i>also gambling</i>. We know it is, but saying it&#x27;s legal gambling won&#x27;t bring on new customers. It takes a lot of work to say &quot;100% Legal&quot; all over your site and still not have people sign up.<p>The US is a funny country. We don&#x27;t legalize online poker but we legalize in-person poker in casinos all across the country. We legalize DFS but not online poker. Where is the logic in this?<p>For the HN crowd, if you want to try it and you like sports stick with the above advice: don&#x27;t play if you have a proclivity for compulsive or irresponsible gambling. Don&#x27;t put a lot in (and only put in funny money, nothing you would otherwise use for say, your mortgage), and exercise a bit of statistics and probability theory so you mitigate some of the risk. If you do that, you won&#x27;t become a sucker.<p>[1] Kelly criterion - <a href="https:&#x2F;&#x2F;en.wikipedia.org&#x2F;wiki&#x2F;Kelly_criterion" rel="nofollow">https:&#x2F;&#x2F;en.wikipedia.org&#x2F;wiki&#x2F;Kelly_criterion</a>