By Steve Petrella
Mark thought he had the right approach. He did his homework, studied winning strategies and went against the grain. And he even won his fair share of contests. But he kept chasing a big pay day, and things spiraled out of control.
Eventually, when he stepped back to see the carnage, the 43-year-old firefighter from Florida says he’d lost about $20,000, all on daily fantasy sports.
“I have so much guilt and regret,” said Mark, who asked that his name not be used. “Now that the fever’s kinda broke and I’m looking back at how much damage I’ve caused to myself and my family, it’s something I wouldn’t wish upon anyone. It’s just awful.”
Mark began playing daily fantasy sports (DFS) prior to the 2014 NFL season and continued with NBA and MLB until a few months ago. He’d seen commercials with testimonials from winning players and thought he could turn his knowledge of sports into cash.
Like many Americans — an estimated 56 million that play fantasy sports — Mark had found a hobby. But that hobby, while legal, became destructive and addictive.
Over the past month, daily fantasy sports have come under increased scrutiny from lawmakers and a population drowned out by the industry’s advertising, and many are calling for change. That’s been amplified by news Monday that a DraftKings employee leaked player ownership percentages prior to contests beginning.
The operators don’t view their games as gambling. It’s allowed them to stay legal and get involved with the American professional sports leagues. FanDuel did not respond to interview requests for this story. DraftKings said in a statement “fantasy sports contests are games of skill that allow players to exert their skill to create winning lineups.”
“It’s facile and easy for people to just lump fantasy sports together with gambling, but it’s not a fair thing to do,” said Glenn Colton, an attorney and spokesperson for the Fantasy Sports Trade Association. “The law is what it is, and Congress has spoken and has said, quite correctly in my view, that fantasy sports is not betting or wagering.”
A game of skill can be addictive
Plenty of people deposit money on a site like DraftKings or FanDuel, the overwhelming market leaders. They enter a few contests, lose their money, and then quit.
But Mark’s compulsive behavior cost him a chance to set up college funds for his three children, all under 10 years old. He works a construction job when he’s not at the firehouse to pay off credit card debt he racked up playing DFS. In about 18 months, when he’s paid it off and doesn’t have to hear his 7-year-old son ask why he has to go to work all the time, he can exhale — but will then go back to work to get ahead and actually save some money for his kids.
His family was on a tight budget to begin with, and now, it’s nearing disaster.
“(My son is) trying to go in his piggy bank and give me money so I wouldn’t have to work,” Mark said.
DFS operators argue their games are ones of skill and not gambling, and the numbers do back that up. From Bloomberg:
“The top 100 ranked players enter 330 winning lineups per day, and the top 10 players combine to win an average of 873 times daily. The remaining field of approximately 20,000 players tracked by Rotogrinders wins just 13 times per day, on average.”
The market is dominated by a small percentage of “sharks,” many former financial professionals and poker players. They’ve built statistical models to create hundreds of optimal lineups per week and while there’s always variance, these players dominate the field long term. Their investment strategies resemble those a hedge fund operator would understand, not your average sports fan.
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This non-gambling stance by DFS operators has allowed them to foster lucrative partnerships with the American sports leagues and the NCAA, though those bodies have long been opposed to legalized sports betting, saying it affects the integrity of the game.
But at their core — wagering money on an uncertain outcome — DFS is gambling, says Timothy Fong, co-director of UCLA’s Gambling Studies program.
“It’s putting lipstick on a pig,” Fong said.
“It has all the same characteristics as other forms of gambling that create addiction. It’s fast. It’s anonymous. It’s accessible. You can lose and spend unlimited amounts of money on it. It has all the hallmarks of online casinos.”
Arnie Wexler, a compulsive gambling counselor in New Jersey, says the same. So does Kenny White, a former Las Vegas oddsmaker. So do New Jersey legislators Frank Pallone and Ray Lesniak, who want to see traditional sports betting legalized for the benefit of their state.
And so does Mark, who’s lived two different hells.
Mark, a four-year army veteran, first bet on sports against a point spread in the late 1990s. He lost “about $4,000-5,000” to a D.C.-area liquor store owner turned bookie, but eventually paid it off.
Then in 2008, he lost more than $10,000 to an offshore sportsbook, betting everything from pro football to eastern European soccer.
“I kinda tricked myself,” he said, “that (DFS) was different from against-the-spread betting.”
The FSTA, which represents the industry, says on its website that “managers must take into account a myriad of statistics, facts and game theory in order to be competitive” and must also “take into account injuries, coaching styles, weather patterns, prospects, home and away statistics, and many other pieces of information in order to be a successful fantasy sports manager.”
But many of the same processes are used to bet sports, says White, who set lines in Vegas for more than two decades. DraftKings CEO Jason Robins said on “Outside the Lines” Wednesday that picking against a point spread will result in roughly an even split, making it chance-based.
“To beat sports betting is a skill. And the fantasy games are a skill,” White said. “But you go on DraftKings and go head to head (with) somebody for $5,000. … That’s gambling.”
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That accessibility is what makes these games so dangerous, says Wexler, who has been helping compulsive gamblers for more than 40 years. A player can create a lineup for cash in under a minute.
“What addicts compulsive gamblers is quick, fast action,” Wexler said. “You wake up in the middle of the night, and you’re gambling.”
All you need is a credit card and an email address. The minimum age is 18, but there’s little verification needed on many sites upon registration. Using a pre-paid Visa giftcard, easily obtained with cash at a convenience store, a 13-year-old can create an account.
Wexler runs a gambling hotline and says he hasn’t treated any fantasy players yet. He said after an industry booms, calls roll in six months to a year later.
Because their legality depends on not being classified as gambling, DFS operators offer nothing on their sites to help problem gamblers. Seth Young, COO of StarFantasy, says that’s in the works for his company.
“There’s no reason for us not to do it — it’s not going to hurt,” Young said. “For us, I think it’s just a social responsibility thing.”
Mark emailed FanDuel in March asking them to ban his account and blacklist him from rejoining after he accrued that massive debt and was shamed by his wife and her family, which had heard all about this debt. The company did so. He then signed up at DraftKings shortly after.
Last week, Mark received emails from FanDuel telling him about promotions and new games the site is offering.
His wife, who nearly left him and now has 100 percent control of the family’s finances, doesn’t believe he’s quit.
Somebody’s winning, right?
Daily fantasy sports are parimutuel, meaning all players are competing in a pool against one another. The operator then takes a rake. So a player is trying to beat his peer, not a house or bookie. Some do it often.
Cory Albertson calls the DFS/gambling argument a meaningless one. The 31-year-old who makes a living playing daily fantasy sports says lawmakers should focus on regulating the industry to make sure it’s safe and enjoyable for everyone. He also believes some pools should be segregated to keep novices away from experts.
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With a partner, the former online poker player and Notre Dame MBA graduate has made thousands of dollars playing DFS. To him, gambling is a spectrum that includes everything from options trading on Wall Street to poker.
Albertson enters close to 1,000 lineups on an NFL Sunday. He won’t say how much he invests or has won, but is among the “sharks” dominating the field.
Albertson is busiest on Saturdays, when he adjusts his projection models to reflect injuries and the latest news. Then on Sunday, he spends time with his girlfriend.
With a positive expected value system that will make him money long term, Albertson doesn’t have to (and can’t) follow every lineup. He has rooting interests — like if a player he owns in 10 percent of lineups is only owned by four percent by other players — but it’s largely a big-picture investment strategy.
“I’m just a guy with a laptop,” Albertson said. “The skill aspect is being able to organize that info intelligently and sift through the noise to find the signal and make the best decisions you can when you’re making your lineup.”
Kicking a habit
Mark is a guy with a laptop, too. He just couldn’t make responsible decisions with his bankroll. While Albertson tries to occupy a carefully-calculated percentage of the DFS market as it grows, Mark chased the money.
When his wife, whom he married in 2005, discovered Mark had cost the family $20,000, she took complete control of their finances. She had enough after Mark’s two run-ins with compulsion and gambling-related debt. And she “absolutely considers” DFS gambling, he said. If he’s caught playing again, she’ll be out the door that day.
Last month, Mark couldn’t avoid the advertisements of DraftKings and FanDuel. He had been doing tons of research leading up to the season — his wife discovered the debt in August — and didn’t want that work to go to waste.
So at the grocery store several days before the NFL season, Mark used cash back — essentially laundering it, he said — to buy a $20 pre-paid Visa and deposit it on DraftKings. He won $500 in the Week 1 “Millionaire Maker” tournament, the site’s signature contest, by placing 606th out of 572,500 entrants.
But now that $500 is just sitting there. He can’t take it out, because his wife will know he started playing again. So he continues playing.
“As a 43-year-old male, I have no control over my own finances now because the trust level has been destroyed,” he said.
Despite the relapse, Mark says he’s committed to never depositing money again. From 2008-2014 — between his battles with sports betting and DFS — he hadn’t placed money on any sporting events.
“I was a yacht above water and being able to reflect on how bad this is, how horrible this is, I’m just disgusted by this,” he said. “I feel like I will never do it again.”
But that money still sits in Mark’s account, waiting to be played. And it can be played quickly and compulsively.