For many, fantasy sports are a regular part of life. Those reading this might be long time season-long players, players who think that they can take the skillset and knowledge that they’ve acquired over years of beating their friends for a couple hundred dollars a season to the real of daily fantasy sports (DFS) and start taking all the world’s suckers for their money. I call this fish in the well syndrome: you’re the biggest and most powerful fish in your area, but your area is smaller than you think, and you fail to realize that your dominance here is unlikely to translate to new arenas.
This shouldn’t discourage you from trying your hand with the big boys, but it should help temper your ambitions. Realize that there are people who make their living playing daily fantasy sports, and it’s incredibly unlikely you’re going to walk over them. What’s a fish to do if it wants to venture out to new territories?
In the first installment of our Daily Fantasy Football 101 series, I discuss some basic concepts of controlling your bankroll so that fantasy football doesn’t bankrupt you. So keep reading: we’re here to help!
First, A Daily Fantasy Sports Primer
Before we start discussing how to manage your money when playing Daily Fantasy Sports (DFS), let’s get some necessities out of the way. DFS covers the gamut of fantasy sports: MLB, NBA, NHL, NFL, etc. (some sites even allow betting on eSports, believe it or not). Since we’re a football site, we’re only going to talk about Daily Fantasy Football (DFF). There are several types of daily games in which you can compete, and they’re split into two primary categories: Cash Games and Guaranteed Prize Pools:
Cash Games
- 50/50 Games: In these games, the top 50% of the contestants in the game payout. For example, a $10, 10 team 50/50 game will pay out $100 on a descending scale to the top 5 players. The payout to entrance fee ratio is easily the lowest in these game types, but they’re probably the most reliable earners given the number of winners in each game.
- Boosters Games (Double, Triple, and so on): In these games, X number of contestants pay out the entrance fee times the game type: double, triple, or the booster multiplier (you’ll see 10x booster and higher depending on where you play).
- Head to Head: You can go mano-a-mano with another player for a winner-takes-all* competition.
- *NOTE: Minus the rake. Just as the house rakes a percentage of the pot in poker, the hosting company takes a percentage of entry fees in all DFS game types.
Guaranteed Prize Pools (GPPs)
GPPs are the games you hear about on the TV and radio. These games are comprised of enormous contestant pools that pay out massive prizes to the winners, typically the top 25% of contestants. The companies pay out the promised prize even when the contest isn’t full, so there’s a small chance you could benefit from an unfilled tournament.
Tip 1: Set Your Bankroll and Never Play Beyond It
Proper bankroll management should always remain in the forefront of your mind. When you play daily fantasy sports, you’re taking a financial risk. No matter how daily fantasy sports are defined in a legal sense, remember that you’re putting your hard-earned money on the line, so don’t commit more than you can afford to lose in hopes of striking it big.
What is a Bankroll?
A bankroll is the money that you set aside to wager. In this case, I am assuming all your bets are placed on daily fantasy football (DFF) games and tournaments.
Determining Your Bankroll
Risk tolerance varies individually, so bankroll determination is entirely personal. There is only one rule for determining your bankroll: don’t wager more than you’re comfortable losing. If $500 will jeopardize your ability to pay your bills, don’t deposit $500 hoping to strike gold on a GPP (Guaranteed Prize Pool) tournament.
Starting Out
New players should start slowly, playing free games until they’ve acclimated to the differences in daily vs season-long fantasy. Most of the free tournaments don’t pay anything, but this way you’re not losing your money while you learn, and there are $0 entry Beginner GPPs giving away fairly large prizes. DraftKings has a $100,000 tournament ($500 to the top 138,445 players in the one I’m looking at right now), while FanDuel has a $50,000 free play (which offers cash prizes on a descending scale, in addition to contest tickets for larger prizes).
As you start to feel more comfortable in the new arena, start playing small money games. Don’t jump into the higher entry fees looking for big payouts until you’ve built your bankroll and found consistent success in the free and low-cost competitions. Even if you have a ton of cash to throw away on DFF, the people playing big money games are likely seasoned players who have found winning formulas in high-entry fee games, which is not a group of people you want to face off against, especially as a newcomer. You wouldn’t play 100/200 blinds in Vegas the first few times you went there because those players would eat you alive; apply the same logic to DFF.
Basic Strategies for Setting Your Bankroll
The general sentiment in online discussions is to commit 10-15% of your overall bankroll to your weekly bankroll (some go as high as 20%, but that’s too risky for my taste). You should allocate 70-80% of your weekly bankroll to Cash Games, of which the majority should go toward 50/50 games, since they have the highest payout probability. Here’s a simple example using a $1,000 bankroll (granted, this is entirely unrealistic for most people):
| $1,000 | Total Bankroll | $1,000 |
| x 10% | x Weekly Spending in % | x 15% |
| $100 | Weekly Bankroll | $150 |
| x 70%|80% | x Cash Game Allocation in % | x 70%|80% |
| $70|$80 | Weekly Spending | $105|$120 |
The hope is that you’ll generate sufficient winnings from Cash Games, which have a higher payout probability, to offset the losses you will likely incur at a higher rate in the GPPs (since the player pools are larger, and the winning percentage is smaller). A couple of further considerations for your bankroll strategy:
- All bankroll advice assumes that you have a reasonable success rate. If you’re losing more often than you’re winning, it doesn’t matter how you allocate your funds: eventually you will go broke.
- If you’re hitting payouts on 50/50s, but are not regularly placing in the top 20-25%, you probably need to reassess your roster strategy.
- Until you figure out how to consistently win the higher prizes in 50/50 games, consider allocating an even higher percentage of your weekly bankroll to Cash Games (80%+), since lower payouts mean you need them more frequently to offset losses elsewhere.
Tips for Bankroll Maximization
Take the Deposit Bonuses
Take advantage of deposit bonuses as much as you can. If you’re planning to deposit $50, and the site on which you are depositing will match up to $75, consider putting in the extra cash. You can always withdraw your remaining balance if you decide that DFF is not for you. If it is your thing, sometimes sites will offer reload bonuses, and you should try to get those, too.
Stay Out of Shark Infested Waters
On both DraftKings and FanDuel, you can view the tournament entrants before committing your money. Both sites also have experience ratings based on the number of contests a player has entered, and the money they have won from those contests. Players that have entered 500 contests and pulled down $1,000 prizes multiple times have found a winning formula, are probably going to take your money, and are best avoided (especially when you’re new and/or have a low bankroll).
Grind It Out
Grinding low money games is how you win consistently. I know, low stakes don’t give you the same thrill that you get from those $100 buy-ins, but the latter is a good way to go broke. If you’re that into giving away your money, consider looking for the warm-hearted feelings you get from donating to a worthy cause or charity (they could probably use the money more than the fantasy sharks anyway).
Look Out for the Overlay
Companies pay out the entire guaranteed prize even when a GPP doesn’t fill all the its seats. I don’t know why it’s called an overlay, but since that’s what everyone else calls it, that’s what I call it. The point is that there are fewer people, so the chances of placing in the money are greater. For instance, if a $2,000,000 tournament with 100,000 seats pays out to the top 25,000 contestants, you have a 1 in 4 chance to win money. If only 75,000 seats get filled, the tournament still pays all $2,000,000, but your chances of placing in the top 25,000 are now 1 in 3.
When to Cash Out
Proper bankroll management entails more than your financial inputs. Properly managing your money means that you’re retaining at least some of your winnings. Your goals will determine exactly how to approach withdrawals, but here are a couple of general ideas:
Strategy 1: Wager Only Your Initial Investment
By this, I mean that if you deposit $100 at the beginning of the season, and by week five you’ve somehow managed to win $500, pull the $500 and keep playing with the $100. This way, should your winning streak come screeching to a halt, launching you into a pit of miserable defeat after miserable defeat, you won’t feel bad about being an idiot who couldn’t quit while he was ahead. In fact, you’ll still be $400 up, so you can take the wife and kids out for a heck of a dinner, or do literally anything else that you can do with $400.
Strategy 2: Wager Only Your Winnings from the Initial Investment
Should you miraculously find yourself up $500 in five weeks, pull out your initial investment and play only with what you’ve won. Should you fall into a pit of despair and lose all $500 of your winnings, you might feel like an idiot who couldn’t quit while she was ahead, but at least you didn’t really lose anything: you were playing with house money.
Strategy Comparison
Obviously, strategy 1 is your only option if you never win, but losing all your money isn’t much of a strategy, so let’s hope that doesn’t happen.
Strategy 1 is clearly the more conservative approach.
For those of you who don’t want to put hours of weekly research into DFF to win a few dollars, or for those looking only to gain some rooting interest in games not involving the Packers (or whoever your favorite team might be, and if it’s not the Packers, I’m surprised you’re here), I’d suggest playing only with your initial deposit.
If you follow the basic strategies for setting your bankroll, you’re not going to lose enough money to bother you, and you’ll still have some fun screaming at Demaryius Thomas for dropping yet another wide-open hitch in the end zone, even though it hit him square in the hands. If you’re willing to put in a bit of work, or you just get lucky, you might even make a few dollars.
Strategy 2 is also conservative, just less so than Strategy 1.
If you’re less risk averse, or you’re looking to make some decent side cash this season, then you might try this approach. With strategy 1, you’ll probably never have a significant enough bankroll to make any real money, so strategy 2 protects you from losing your initial investment, while allowing for the potential to amass an enormous bankroll over time.
You might get so good that you can use DFS to contribute a significant portion of your income. I’m not sure that’s the best way to live your life, but I’m not your life coach, am I? There are plenty of people who make their living playing DFS. As far as I know, all those people play DFS year-round, so you’ll need to figure out how to win at those sports, too, and if that’s your dream, who am I to stop you?