The Rise of Daily Fantasy Sports (DFS) and Sports Betting

The Rise of Daily Fantasy Sports and Sports Betting

If you’re a US sports fan, you’ve probably come across daily fantasy sports (DFS) in some form. Daily fantasy sports platforms have lucrative advertising deals from major sports media outlets, and they’re slowly overtaking traditional, season-long fantasy sports. But what are daily fantasy sports, anyway?

In this article, we’ll break down where daily fantasy sports apps come from, and how they’ve managed to enjoy such a meteoric rise in popularity. We’ll also compare daily fantasy sports vs. sports betting, and consider whether DFS has the potential to eclipse sports betting any time soon.

Where Do Daily Fantasy Sports Originate From?

The birth of the daily fantasy sports industry started with sportswriter Daniel Okrent in 1980. He invented the concept of a “fantasy baseball league” over a few beers with friends, and the concept grew quickly among avid sports fans. Soon, fantasy sports expanded beyond baseball to other sports and leagues.

By 1984, a publication called the Fantasy Football Digest emerged, which marked the first formal declaration of rules, strategies, and tactics for fantasy sports. From there, during the mid-1990s, a major national newspaper introduced a dedicated weekly column in its sports section, and the Fantasy Sports Trade Association was founded in 1999.

Who First Played Fantasy Sports?

In the first iteration of fantasy sports, the focus was on fantasy sports as a hobby. It was a way to keep in touch with a group of friends, and a method to build a community among sports fans. In the majority of cases, before the age of daily fantasy sports, it was the trophies and bragging rights that were coveted, not the financial payoffs.

Fantasy sports became so popular that a television show aired centering around a group of friends in the same fantasy league. The show was critically lauded and ran for seven seasons, from 2009 to its finale in 2015.

However, the introduction of daily fantasy sports in 2007 changed the way people thought of and played fantasy contests. Just like how the internet transformed how people bet on sports, it drastically altered how people played fantasy sports as well.

How Do Fantasy Sports Work?

Daniel Okrent’s idea for a fantasy league centered around fantasy players, usually called managers, drafting a team of current professional players onto their rosters at the beginning of the season. They maintained their teams throughout the professional season by adding, dropping, or trading players with other managers.

Understandably, fantasy sports managers need to have a depth of sports knowledge and research in order to have a successful team. From the start, fantasy sports have had a reputation as a skill-based enterprise.

How Are Fantasy Sports Scored?

Scoring is based on a compilation of points gained, based on selected players’ statistics within the sport. For baseball, a player would be rewarded for home runs. For hockey, it comes down to goals. In football, touchdowns and field goals provide points. The winner of the league is the person who has the most points, meaning the players with the strongest statistics.

Fantasy sports can be infinitely customized to the preferences of the particular league, but the basic principles underlying scoring, drafting, and roster modifications are similar regardless of the particulars.

How Daily Fantasy Sports Differ From Regular Fantasy Sports

While daily fantasy sports are similar to regular fantasy sports in many aspects, the fundamental differences are the timeline and number of people that managers compete against. In daily fantasy sports, the prizes are generally harder to win, but much more lucrative. Prizes for a single competition can go above $100,000.

Regular fantasy sports are season-long, while daily fantasy sports are, as the name suggests, daily. Instead of competing for the entire season, daily fantasy sports players draft a brand new lineup every time a new set of games is ready to be played.

As such, the time commitment with DFS is much smaller and, if a manager has a lousy team, they are allowed to create a brand new one every day. Daily fantasy sports are essentially season-long contests, shrunk into a single day.

These are fantasy sports for the kind of person who might be attracted to a sports bet on the moneyline, or a bet against the spread. It is for the type of person who is anxious to find out whether they have won or lost, and DFS action provides that information by the end of every day.

Where season-long fantasy is limited to a small pool of people, generally friends or co-workers, DFS managers can compete with hundreds, thousands, or even millions of people in one day. The competition is fierce, but many players are attracted to the unique challenge this offers. With so many people playing, winning in daily fantasy sports is extremely difficult, and takes a lot more skill than traditional fantasy sports.

As mentioned earlier, the prizes for winning in DFS are much higher than season-long competitions among friends. Daily fantasy sports even have their own versions of sharps, with some managers being so successful that they have created entire careers out of fantasy sports.

Types of Daily Fantasy Sports

The most common version of DFS involves managers selecting both the sport and particular daily contest they want to enter. Different daily competitions have different rules and regulations, and some DFS apps offer a variety of game types, from pick’em formats to best ball contests, often with enticing sign-up promotions.

From there, managers draft a group of players in their selected sport that have to fit under an arbitrarily imposed salary cap. Usually, players are assigned a cap hit that depends on a variety of factors, ranging from pedigree to recent performance.

Once they have picked a team, managers have to wait for the real games to start, then watch how their team fares against competitors. The specifics of the scoring will vary by contest, but they are based around points gained for players’ statistics.

If the manager’s team wins, or finishes in a high-paying position such as the top 10, they are rewarded with cash. Of course, the size of the cash payouts varies, based on how much it costs to enter and the specifics of how the contest is structured. A DFS contest that requires a small entry fee will have a much lower payout than one that costs significantly more to join.

The Internet and the Growth of Daily Fantasy Sports

Just as the internet expanded the possibilities of sports betting, it has done the same for fantasy sports. Daily fantasy sports can involve millions of participants from across the world from the comfort of one’s desktop or mobile phone, through dedicated applications. Just as it has never been easier to place a sports bet, it has never been easier to get involved in daily fantasy sports.

Large advertising campaigns from daily fantasy sports operators have paid off, and it has been estimated that daily fantasy sports would become a multibillion-dollar industry, with millions of DFS managers participating each year and a dedicated following that continues to grow.

The fact that daily fantasy sports require only a daily investment of time, and the fact that managers can recreate their teams every single day, has resulted in a tremendous boom to fantasy sports. Ultimately, the accessibility and visibility of fantasy sports have done wonders for growing the daily fantasy sports market size.

Daily Fantasy Sports and Their Connection to Sports Betting

Daily fantasy sports owe a lot not only to the internet but also to the era of online sportsbooks. In fact, the infrastructure of daily fantasy sports, including mobile platforms, deposit methods, and user experience and interface design, is directly inspired by many of the highly respected online sportsbooks in the market.

Daily fantasy sports are in no danger of overtaking online sports betting, which is presently a massive industry in the United States and on the rise. With the recent federal legalization of sports betting in the country, this figure is sure to continue to increase.

Free-to-play sportsbooks are also increasingly popular, allowing bettors to get the full sports betting experience without risking their hard-earned cash.

Strategies That Help in Both Sports Betting and Daily Fantasy Sports

To be a successful DFS player requires sports research and knowledge, which is transferable to the realm of sports betting. Statistical resources, advanced metrics, and injury reports that help bettors make informed wagers are equally beneficial to a daily fantasy sports player building lineups.

Understanding how odds, projections, and market movement work can give both bettors and DFS managers an edge. Many of the same analytical tools used to handicap games can be applied to evaluating player performance and matchup advantages in fantasy contests.

There is also an important legal distinction between daily fantasy sports and traditional sports betting. DFS has, for long stretches, remained beyond the purview of federal law enforcement in ways that sports betting has not, and legal guides often explore why fantasy contests have been treated differently from wagering on game outcomes.

Author and Context

The article’s insights come from an experienced sports media professional who has spent years covering sports betting and online gambling. With extensive industry knowledge, the writer brings context to how DFS and sports betting intersect and why both continue to grow rapidly in popularity.