Quote Originally Posted by Ed-Collins:
Not just DraftKings and FanDuel. Yahoo is guilty of terrible rakes too, and in some cases, it's even worse than the example you gave.
This is the first year for Yahoo, for their Daily Fantasy Contests. I took a look at it in some detail this past weekend.
There's all sorts of contests. Some of the contests have very large prizes, which requires you to finish in the top 10% of so of the field. Their Million Dollar Baller for example, is guaranteed to pay out a million dollars, with $100,000 going to 1st place. The top 28,495 players will share the remaining money. $60,000 to 2nd, $25,000 to 3rd, and so on, all the way down to $15.00. This contest costs $10 to enter.
And then there are lots of the "Double Ups." With these contests you only have to finish in about the top half of the field. If you do so you double your money.
For example, I'm looking at one Double Up contest now, that is limited to 113 players, for a $10 entry fee. The top 50 entries will all double their money. 50/113 = 44.24%, so you have to finish in the top 44% to cash. (Whether you're at position 1 or position 44, it makes no difference.)
There are also Quadruple Up contests, where you essentially win 3 times what you bet. (You get back 4 times, but it's only a win of 3 to 1. 3 TO 1 or 4 FOR 1.) One such contest is limited to 2,840 players, and the 625 players will all share the prize pool equally. (In the top 22% to cash.)
There's also head to head contests, where you are just competing against one other person.
Anyway, you get the idea... lots of choices of contests. And as you might expect, there are entry fees ranging from as low as $1.00 to as high as $1,050, for all of these different contests.
The house edge? Very high, for most all of them. A few contest examples:
Max entrants of 1,704, $10 entry fee. House collects $17,040 with a total prize fund of $15,000. House edge = 11.972%
Max entrants of 444, $50 entry fee. House collects $22,200 with a total prize fund of $20,000. House edge = 9.910%
Max entrants of 200, $109 entry fee. House collects $21,800 with a total prize fund of $20,000. House edge = 8.257%
Max entrants of 40, $530 entry fee. House collects $21,200 with a total prize fund of $20,000. House edge = 5.660%
Max entrants of 20, $1,050 entry fee. House collects $21,000 with a total prize fund of $20,000. House edge = 4.762%
At least the house edge does go down as the entry fee increases. And with a $1,050 entry fee(!) at least now it's in the range of our familiar 11 to win 10. (Recall the house edge on an 11 to win 10 straight wager is 4.545%)
There was one contest that had a PLAYER edge. (An overlay!) It was the Million Dollar Baller I mentioned earlier. This contest was guaranteed to run and yet didn't fill up. Only 77,788 players joined, at $10 each. Since the prizes returned totaled a million bucks, and since it only generated $777880 in prizes, this created an overlay and a PLAYER edge this past weekend of 28.555%. This is huge, of course. I'm anxious to see if that continues.
I really don't understand why books have to be so greedy. 11.972% house edge? Seriously?
Of course, the average player has no idea about this or how terrible that is for them.
Sorry, just getting back to this thread.... Fell off my radar.
Great post though.
And agree with your conclusion. Why so greedy? If the idiots in Congress actually look at the greed aspect of it, that will be a rallying point around these sites ripping off the public.
Seems like a huge cash grab to me by the sites. Get it while they can. Huge rake, huge advertising - and they know regulation is coming so get it while they can.
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