These days, fantasy football comes in two flavors: season-long and daily. Daily fantasy football is experiencing explosive growth with each passing year. Participants pay more than a billion dollars per year to enter into these competitions, which come in countless forms. Currently, companies like DraftKings and FanDuel are plastering advertisements all over the place to draw in new players. Such tactics are working, and DFS industry as a whole is expected to keep on growing without pause.
What is Daily Fantasy Football?
The best way to describe daily fantasy football is to contrast it with season-long fantasy football. In season-long leagues, participants draft a team and play with the same general team every week. They play an entire season, and the top participants receive cash awards after the regular season ends. Daily fantasy competitions include a pool of individuals that choose a lineup for each entered match. Typically, a salary cap is implemented to ensure that participants choose their lineups in a strategic manner.
An individual might pay $1, $2, $5, or even $25 to enter a given daily competition. The pool of players can include anywhere from 2 to 10,000 (or more) total participants. Depending upon the competition type, top point scorers for the day earn cash prizes. A given contest includes some or all of the football games played for that particular day. Participants wait a few hours to determine whether they’ve won money, and they can enter as many competitions as desired each day that features games.
Why is this form of fantasy football so popular?
Perhaps the biggest benefit of daily fantasy football is that it’s quick and dirty. Participants can enter contests throughout the day and create separate or identical lineups to compete against others. For some, the act of meticulously crafting a lineup that falls under the salary cap brings forth a major rush. Most participants are looking to win as much money as possible, and millions of dollars are up for grabs throughout each season. Payouts occur daily, and this fast-paced environment excites many participants.
A Common Concern: Is this illegal?
Of course, it’s common knowledge that online sports betting is illegal in the United States. In 2006, Congress took the time to provide an exemption specifically for fantasy sports. Fantasy sports, both season-long and daily, are seen as a skill-based activity, which means they’re not seen as gambling by the government. Daily fantasy sports operators are free to provide their services to Americans without having to worry about legal repercussions. However, the daily fantasy football does face some challenges right now.
Government Intervention: Bad For Business
Although daily fantasy football is seeing its glory days, some troubles could stop the train from moving forward. Congress is mulling the decision to launch an investigation into both DraftKings and FanDuel. That negative press could hurt the entire industry. Recently, a scandal involving an employee of a DFS operator caused strife inside and outside the industry. The government apparently isn’t too happy about all of the daily fantasy sports advertising deals with Major League Baseball, the National Football League, and others.
Government intervention isn’t a guarantee at this point. Still, any form of investigation or attempts to alter the fantasy sports gambling exemption would be bad for business. If the industry is forced to follow the same rules as casinos, then billions of dollars could be at stake. Everything has been golden for the fantasy sports industry up until now, but a turning point could be coming based upon the federal government’s reaction (or lack of a reaction) to recent events.
Will the explosion in growth and popularity come to an end?
Either way, daily fantasy sports operators are currently enjoying a period of endless growth and increased profits. Millions of people participate in DFS sports throughout the year. Even individuals that don’t care about sports are making their way into DFS and learning how to profit from this opportunity. Unless Congress steps in to force changes, DFS operators will continue reaping the benefits of increased membership numbers and growing profits. Now is, without a doubt, the right time to be a DFS operator.
If the industry avoids outside pressures from Congress or other entities, then things will continue without a problem. The industry is expected to take in over $2 billion in entry fees during 2015. Analysts expect that figure to double by 2020, and such growth is nearly unheard of today. In the end, growth is the name of the game with daily fantasy football (and other sports).