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Everything You Need to Know About DFS

What is DFS?

Daily Fantasy Sports (DFS) are a type of fantasy sport games that can be played over short-term periods, such as a week or single day of competition, as opposed to those that are played across an entire season. 

How to Play

As with traditional fantasy sports games, players compete against others by building a team of professional athletes from a particular league while remaining under a given “salary cap”. The players earn points based on the actual performance of the players in real-world competitions.  Daily fantasy sports are typically structured in the form of paid competitions typically referred to as a “contest”; winners receive a share of a pre-determined pot funded by their entry fees. A portion of the entry fee payments go to the provider (i.e. Draftkings), this is known as rake revenue. 

Who Should I Play With?

In the US, the daily fantasy industry is dominated by two competing operators: the New York-based FanDuel, and the Boston-based DraftKings. Both companies were established as  startup companies, received funding from investment firms, sports broadcasters, leagues, and team owners, and became known for the aggressive marketing of their services. There are now several small operators to play with as well, these include ParlayPlayMonkey Knife Fight, Prize Picks, and Ownersbox.

DFS In The News

Early on, DFS was widely criticized over its similarity to sports betting; multiple U.S. states ruled that DFS games constituted gambling and sports betting, arguing that their elements of chance were predominant over those of skill. A New York State lawsuit, spawned from an investigation of allegations that DraftKings and FanDuel employees had used inside information to win cash prizes from each other, spawned retaliatory lawsuits from the companies. They argued that the rulings were the result of a misinterpretation of the nature of their services. By December 2017, 18 states, including Massachusetts and Virginia, had ruled that DFS was a legal game of skill.  These issues became largely moot in 2018, when the Professional and Amateur Sports Protection Act of 1992 was struck down in the Supreme Court. With states free to legalize sports betting, the major DFS providers became bookmakers to leverage their existing customer base. 

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