
A Fantasy Sports Wizard's Winning Formula - sabon
http://online.wsj.com/articles/a-fantasy-sports-wizards-winning-formula-wsj-money-june-2014-1401893587
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swanson
It's been interesting to see the migration of online poker players over to
daily fantasy sports (DFS). It definitely feels like the early days of online
poker - tons of new sites popping up, heavy TV advertising, lots of new money
coming into the "sport". I just started playing DFS this season and it's
pretty addictive. Obviously, I don't think I'll be getting rich off it (the "I
turned $5 into $50k" stories are just lottery winners essentially), but it's
been fun (and a bit scary...) to get into the world of gambling without having
to "know a guy". I've always played fantasy football for "fun" so it's been
exciting to have a bit of cash on the line.

Daily fantasy is a whole new beast - it's at the intersection of data science,
predictive modeling, quants, poker players, sports guys, Vegas, startups
(FanDuel and DraftKings are killing it), bootstrapped entrepreneurs (RotoViz).
You can make some serious money, put down $5 to make your Sunday afternoon
more exciting, or play around with a new data modeling library on some
interesting data.

There's a whole industry built around fantasy sports if you look just past the
surface of ESPN Fantasy leagues. There are subscriptions sites offering
premium content, people willing to sell you their Baynesian prediction models,
ebooks about strategy, weekly video shows talking about the best plays. I read
somewhere that fantasy football was actually worth more as industry than the
NFL!

PS: If you want to try it out, here's a shameful affiliate link because I'm
turning into a gamling degenerate:
[https://www.fanduel.com/?invitedby=swan3788&cnl=da](https://www.fanduel.com/?invitedby=swan3788&cnl=da)

~~~
comrh
I've said the same thing about the early days of online poker to people
putting money in those sites. Have fun and all but watch out for the
regulatory hammer.

~~~
kylebrown
The online poker sites operated offshore, through high-risk credit card
processors.

Fantasy sports markets, otoh, have Yahoo and CBS as operators (both take ~30%
rake). FanDuel is processing a few hundred million through PayPal. Presumably,
these companies are all paying taxes, so this time everybody's in on it.

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nissimk
This is a tough business to win as a player. The house is taking 8 - 10% rake
meaning you have to have a 60% winning percentage just to break even. Much
better business to be the house. Even if 30% of the players are highly skilled
handicappers it's going to be very hard to consistently win this game. Sounds
like fun to play, but as in all gambling enterprises, the real money comes
from operating the casino, not playing there.

When I heard the fan duel ads on the radio and then saw it on ESPN, I couldn't
believe that it was legal. Then I saw the law with the exception for fantasy
sports and I was just super jealous of these legal sports book operators.
Running an online sports book is like having a free money machine.

~~~
downandout
The rake is definitely unsustainable. Currently, its negative effects are
masked by an influx of new players (Fanduel is growing roughly 300% per year
[1]). But when that growth slows, the only people left to be ground into dust
by the rake will be the longer-term player pool that once feasted on new
players. One by one, they will lose their entire bankrolls, until the whole
model collapses. They will eventually lower it, but it will almost certainly
be too late by then.

[1] [http://fanduel.com/investors](http://fanduel.com/investors)

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ericdykstra
I have a lot of knowledge of advanced baseball statistic analysis, and played
about $100 per day this year during the season, making a profit of ~$2000.
This is my third straight winning season, but the first where I actually wrote
code that spat out lineups.

I spent no money on data, everything you need is available for free.

If anyone has advanced knowledge of other sports and wants to collaborate,
send me an email or tweet. Contact info in profile.

Here are my 2014 MLB results from Fanduel, the site I spent the majority of my
time on:

    
    
      Entered  $15,128.00
      Won	   $17,022.04
      Profit   $1,894.04
      ROI      12.52%
    

Data: [https://docs.google.com/spreadsheets/d/1rN8vhO1nZlojF-
wiFSgq...](https://docs.google.com/spreadsheets/d/1rN8vhO1nZlojF-
wiFSgqsH4Tapw2-s8dRjepN3ahdlM/edit#gid=1969450444)

~~~
downandout
Interesting...I tried doing machine learning for daily fantasy baseball and it
just didn't work. I wrote a scraper that put Fanduel results and contest
payout structures into a database, then backtested against thousands of
contests to see where I would have wound up had I played in those contests
using projections from the machine learning algorithm. I figured I would
eventually make the algorithm profitable. Unfortunately I was wrong. I
couldn't find any combination of data to feed into the algorithm that
consistently put me in the green. At least I wasn't actually playing and
losing money.

I finally gave up after a few months. The scraper data was fascinating
though....there were a few players consistently yielding 80%+ ROI across
hundreds of entries.

~~~
kylebrown
I'm actually surprised you didn't overfit the data until the backtests showed
you had a profitable algorithm. I bet most people would've done that.. I'm
curious, what kind of algo were you training?

~~~
downandout
With Weka, I was able to test a wide variety of algos. When every Weka algo
failed, I tried Google's prediction API with a wide variety of combinations of
data and that failed as well. I thought for sure that one of them would work.
Unfortunately, not a single one got me profitable over the long term. I could
actually win slightly more than 50% of the time on 50/50 and "Double Up"
contests, but that doesn't beat the rake.

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fleaflicker
I have never understood why daily games are legal. The outcomes can be
determined by random events like injuries or the weather. How is this not
gambling?

~~~
duwease
It's legal because no major industry has turned their lobbying efforts on
outlawing it yet. There's no clear philosophical line between gambling and,
say, investing.. there's just (decreasingly) moral crusaders and
(increasingly) interests who profit from keeping things illegal outside of
their personal holdings.

~~~
lazyant
This. Basically it doesn't compete directly with casinos (casinos bribe, I
mean lobby politicians to pass anti-gambling laws).

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rebel
I've always wondered, do you need a licensing deal to use individual player
stats etc. to run a site like this? If not, it seems like the barrier to entry
would be quite low and you wouldn't even really need the network effects that
poker requires.

~~~
sambrand
No. The stats seem to be in the public domain. See:
[http://www.silha.umn.edu/news/summer2009.php?entry=195089](http://www.silha.umn.edu/news/summer2009.php?entry=195089)

~~~
johnm111888
NFL was thinking about saying they own the stats -- afterall it is their
product. Needless to say that would require lots of lawyers but could
potentially bring in huge new revenue stream.

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dynofuz
I've been thinking about this recently. A developer could do so much better
(he's still copying from spreadsheets). Who wants to put this guy out of
business with me?

~~~
jparker165
You'll surely be more efficient with handling data, but you don't have digital
access to all the data you'd need.

For example, the chance that a player plays at all (if they are in
questionable health) is one of the most important signals. But you can't just
write a regression from past data on that player/team/coach. An intuitive
guess from reading several media reports will be far for accurate. This guy is
surely manually entering a "%chance of playing" driver into these models.

But, if you teamed up with a subject matter expert that fed meta-predictions
into your model, you'd likely end up with better results.

~~~
ioddly
> You'll surely be more efficient with handling data, but you don't have
> digital access to all the data you'd need.

It occurs to me that collating said data in an accessible format for a modest
fee would be a pretty good low hanging fruit business idea. I'm sure there
must be something like that out there but last time I looked into this, 2-3
years ago, I couldn't even get the NBA schedule in JSON or some other
programming-friendly format, let alone things like injuries and lineup
changes.

~~~
TylerE
Everything old is new again

[http://en.wikipedia.org/wiki/STATS_LLC](http://en.wikipedia.org/wiki/STATS_LLC)

"STATS LLC is a global sports statistics and information company – the company
name originated as an acronym for "Sports Team Analysis and Tracking Systems".
It was founded on April 30, 1981[1] by John Dewan,[2] who became the company's
CEO. STATS was an outgrowth of the grassroots non-profit Project Scoresheet, a
volunteer network created to collect baseball statistics, prompted by a
suggestion made by Bill James, who later joined STATS for a time. In 1987,
STATS developed a reporter network for Major League Baseball and provided
research for NBC's postseason baseball coverage, and by 1989 was doing the
same for ESPN's broadcasts.[1]"

