How the Daily Fantasy Sports Industry Turns Fans into Suckers
I always have to preface these opinions with "I used to work in the industry" (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's not that DFS turned him into a sucker, it's that he has a gambling problem - he says this in the beginning of the article! Why do we need to read further, it's pretty clear from that statement alone he'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't very smart with his money either. He'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/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'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'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't turn people into suckers, they already were suckers/gamblers and didn'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'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's legal gambling won't bring on new customers. It takes a lot of work to say "100% Legal" all over your site and still not have people sign up.<p>The US is a funny country. We don'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't play if you have a proclivity for compulsive or irresponsible gambling. Don'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't become a sucker.<p>[1] Kelly criterion - <a href="https://en.wikipedia.org/wiki/Kelly_criterion" rel="nofollow">https://en.wikipedia.org/wiki/Kelly_criterion</a>