DFS should not lose an entertainment element in favor of an intellectual part (с)

Article summary

  1. What fantasy sports means for users and operators

The material was based on the presentation of Simon Kaastrup-Olsen (the founder of the first US FS exchange, cofounder of Global Fantasy Sport) at FantasySport. Ukraine conference.

Simon Kaastrup-Olsen’s presentation was dedicated to Daily Fantasy games: their current special features; main player categories and the role of fantasy game for them; how operators consider fantasy sports as business; as well as future trends and fantasy sports development prospects within legal environment of the USA and Europe.    

Simon Kaastrup-Olsen is a chief product manager at Global Fantasy Sport (GFS). He also presented his company products, told what developments currently exist, what future plans are, and what perspective regarding US fantasy sports legislative regulation the company has.     

GFS is included into Global Sport Entertainment Group (GSEG), which primarily regards fantasy as an entertainment for sports fans. Thus, the organization’s global goal is social focusing of fantasy sports on the broad user audience. GFS develops and promotes solutions allowing users spend exciting time not only sitting in front of computers but also using mobile devices.     

What fantasy sports means for users and operators

Daily fantasy sports is a little similar to poker. For instance, DFS platforms charge an entry fee for each player. Usually, it is 10% on the US market. For example, if 100 people deposit $10 each to participate in the competition, the prize pool will be $900, because $100 is withdrawn by the Internet website.

The main task for a player is to win DFS competition 

Let’s reveal the core of fantasy sports. American football will be an example: there is a draft – set of players. Within this period, you select nine footballers to your team. You have a budget: each player costs a certain sum, you spend money to acquire them. And then these players score points, which are carried over to fantasy sports, in real football match games. They provide the result of your team. Winners are teams collecting the highest amount of scores. A significant detail: you are not playing against the platform but against real people, the same players. That’s why the result depends on your professionalism, skills, experience, because it is you that choose those players who will bring their team points.    

GFS platform interface provides information on each player: how much they cost, how many fantasy points they have scored previously, as well as a prediction regarding the amount of points they can score in future. You can also see a prediction on your team: how many points it can score. 

The main task for an operator is a fair algorithm for dividing players into tournaments.   

Each company working in the DFS segment should have its own algorithm and focus on common players, rather than just top players. It is ordinary players that a big segment of this business is based on. Since it is an absolutely different audience with various characteristics, goals, tasks, and professional skills, different regulation should be applied to these groups of users.         

Why is it so important to grow a player audience? The European gambling market is regulated. Sports betting in the USA is prohibited. But at the same time, DFS is not banned in the USA; it is just not regulated yet. Using these legislation features, companies try to attract as many users as possible to this segment.

One of the main DFS features is the fact that it is a skill game. Thus, operators should take into account that not all players have skills to succeed.     

Let’s review the audience of all DFS players. The most significant part: 80% is common players, 5% is average level players, and only 1.3% of the total amount of website users is experience, successful, professional players, the so-called sharks.  

This is what the distribution of player types based on 2015 US Baseball League season looks like.

Ordinary players deposit only 8% of the overall sum to the total prize pool, average players deposit 36%, and experience professional players deposit 40%.

Ordinary players lose in average 51% of their deposits, average players lose 31%, and only experienced players can receive constant winnings from 7% to 27% of their deposits.   

GFS platform

Today, the majority of platforms for DFS websites allowto choose athletes of the draft. They have almost no statistics, so users frequently have to refer to other paid services or study results and create tables on their own.    

Realizing that it is very difficult for common players to examine everything independently, GFS tries to launch special solutions that will help to find a maximally correct way to achieve good results. It is this very approach that the company considers to be the major competitive advantage of its products in the DFS business segment where the competition is high enough.       

GFS approach is based on providing assistance for players, so they can advance in the game and become professionals. Software already has lots of various statistics and a great amount of very useful data, for example, the following: player personal history, how many players are on the website, how many of them will participate in the competition, etc. While choosing the player (drafting), a user can also see the results of this very player: successes and failures, and can compare them with other players.  

Besides, there are special profiles and groups in social networks, such as Facebook, Google+, Twitter, etc. Players can see profile pictures, follow data, and see their competitors, including their names, comments, and so on, there. Such details allow GFS online platform be the most customer-focused and have an obvious advantage over competitors.

GFS mobile platform

Due to mobile platforms developed for various devices, users can follow the game wherever they are. Mobile interface allows to play various types of tournaments and provide various opportunities. Forinstance, onecanplaywithacertainperson. There are various option sets, depending on players’ goals: to have a pleasant time playing an exciting game among friends or win lots of money. There are also social network features: players can see their friends and other tournament participants. This pleasant feature was implemented to confirm that initially fantasy sports was set to be a social entertainment way.

Simon Kaastrup-Olsen:

“I believe that the future of fantasy sports is not about mathematics, calculations, and statistical operations. It is not for sports betting. It is for sports fans. For common people who often watch sports and who are interested in it. I think that fantasy sports is apastime way where you can have fun with friends, enjoying the game, and, finally, achieve favorable results.” 

DFS future

According to Simon Kaastrup-Olsen, the major DFS aspects that will be developed and changed include the following:

  • Legalization of DFS and sports betting on the US market;
  • Appearance of daily and season fantasy hybrids; 
  • Expansion of entertainment options;
  • Social features;
  • Player regulation;
  • Increase of availability and popularity;
  • Reach of new markets;
  • Integration of sports entertainment technologies. 

Even now, DFS legislation is becoming legalized in the USA quietly. For example, DFS legalization in New York augurs well for the US market.     

As known, daily and season fantasy differs from each other significantly. But GFS thinks that these segments will be combined in future, and fantasy sports will be a bit hybrid, which means that new options and new tournament types will be available for players. For instance, nowadays, players already have an access to private tournaments with many customizable options. 

Social features fully focusing on the audience will be also developed. It means that different approaches will be provided for different types of players. In other words, if one person participates in numerous tournaments, obviously being a professional player, and another person enters and participates in only one tournament, there is a great difference between them and operators should focus on this aspect.    

GFS is going to make DFS entertainment much more interesting for players: not just to make players simply enter the website, deposit money, select their team, and watch the result…   

Simon Kaastrup-Olsen:

“We want everything to be more interesting and are going to add the gamification process, i.e. some social opportunities, news, etc. Besides, you will be able to watch real-time news, see statistics, read comments of other users and leave your own comments, watch some new features in a real-time mode.”

Major developing companies are already implementing various elements of regulating players in order to make everything fairer. GFS uses the so-called corporate responsibility or transparency in its solutions: when users can see who participate in the tournament besides them. The company also grades players by levels, giving newcomers more chances. Moreover, it is the level graduation that will have such an option as each player’s statistics, i.e. high statistics users who have reached higher results can’t participate in tournaments for beginners. All the senovelties will bring more fairness into the DFS segment.

Top players, the so-called sharks, bring the operator 40% of income. Naturally, operators want more such players. But their main goal is to make DFS tournaments more available for common players. It can be reached by developing competition accessibility programs in fantasy sports.    

Other novelties will include format changes. In other words, one will be able not only to enter the website and select 9 players of the draft for their team. There will be also other formats, processes, and ways to advance and become a more successful user.   

Fantasy sports has been existing for more than 20 years. It is just gathering pace in Europe, but it seems like it will be one of leading ways of sports betting soon. Thus, it is this very market that considered to be the most prospective one.   

American and European fantasy sports markets are very different. The main differences include legislative regulation and traditional relation between segments of fantasy sports and classic betting. Traditionally, betting is more popular in the Old World. That is why Simon Kaastrup-Olsen considers the integration of sports entertainment technologies into DFS as one of future trends.  

“As for me, such gambling type as sports betting will be legalized on the American market within 5-6 years. And these segments will be able to interact more efficiently when legislation regulation will be adopted.”