← Daily Fantasy Top 25 Monday NCAA College Basketball It’s the last weekend to play NFL fantasy! →

Sports Gambling vs. Daily Fantasy Sports

Posted on January 25, 2012 by CEO

People like to win money on sports. ESPN estimated that in 2008, 118 million Americans risked money on sports in some fashion. Over a third of the country tried to make money by predicting the outcome of a sports event – but what is the best way to do it?

In today’s sports market, there are two ways sports fans can make money on sports on a daily basis: sports betting, and daily fantasy sports. While sports betting is well known to the general public, daily fantasy sports is a new concept that offers users the same chance to win cash using their sports knowledge. However, sports gambling and daily fantasy sports differ in a few key areas:

LEGALITY

The first one is a big one, and it favors daily fantasy sports. Sports betting – unless you are in Nevada – is illegal in the United States. Sports bettors looking to wager on sports are forced to use illegal channels, like bookies and online gambling sites, to place bets. Obviously these options have risks involved, such as the potential the bookie or site does not pay winners. Left with little recourse (it’s tough to get the police to help you recoup your illegal winnings), winners may lose their profits, even when they make the right sports decisions. Additionally, after the passage of the UIGEA in 2006, credit card companies have become much more diligent about their transactions with gambling sites, making depositing money in an online sports betting account difficult in addition to illegal.

Daily fantasy sports, on the other hand, is legal, and protected by the same UIGEA that led to the increased regulation of traditional sports gambling (and online poker). As long as a fantasy contest contains at least two players and two different competitions (games), players are free to win as much money as they can playing fantasy sports. Because of this, sites like Fantasy Sports Vegas are able to accept major credit cards and pay winnings to users via quick and legal methods. And if a daily fantasy site doesn’t pay you your winnings, you have legitimate recourse.

CHANCE vs. SKILL

After learning that fantasy sports are legal and sports betting is not, many ask why. Besides the simple answer (it’s what the law says) is a deeper understanding of what each competition entails.

Sports betting is considered a game of chance, and daily fantasy sports contests are considered games of skill. While sports gamblers will argue there is skill in picking games correctly (we don’t argue there isn’t), it is the goal of casinos and sportsbooks to make every sports bet as much of a 50/50 proposition as they can so they can pocket the “juice” without risking any money. This is where things like point spreads and money lines come into play – by adjusting the score or amount a bettor has to wager, a casino attempts to turn every game into a “coin flip” scenario. In addition to the handicapping, each bet is made on a single team or player, so each bet is determined by a single selection.

Daily fantasy sports, however, rely on multiple decisions over multiple games, with no artificial methods of weighting the relative players. This makes it a game of skill. In Fantasy Sports Vegas games, for example, players are given simple choices between groups of players, requiring them to select one player in each matchup. As the number of decisions a player makes increases, the skill required increases as well.

To put it another way – a completely uninformed bettor would still likely have roughly a 50% chance of winning a sports bet, as the knowledge and skill needed to weigh the game is provided in the point spread. A completely uninformed fantasy sports player, on the other hand, has a much worse chance of success, as more informed players are likely to make better decisions from the multiple choices they have.

So, like we like to say at Fantasy Sports Vegas, Play Smart and Win Big!

OPPONENTS

In sports betting, the opponent is the house, the casino, the bookie. The person taking the bet is directly adverse to you, and is in effect betting against you. Their profits are directly linked to your losses.

In daily fantasy sports, sites do not directly compete against their users. Instead, sites allow users to play against each other, and collect a fee for hosting the contest by managing the payouts and providing the statistics required.

KNOWLEDGE BASE

As discussed in the Chance vs. Skill section, the knowledge required in fantasy sports is different than that needed for sports betting.

The key distinction is that while most sports betting is done on teams, fantasy sports revolves around knowledge of individual players. Whether betting on which team will win, or on an over/under bet about how many points both teams will score, the sports bettor focuses on the overall knowledge about each team in a competition.

Conversely, the knowledge of the fantasy player focuses not only on the quality of the team and its opponent, but on the relative contributions of individual players on that team. This requires a second-level of analysis, often focusing on which teams are more susceptible to which types of offensive attacks (running vs. passing, low-post vs. 3-pointers), and which players have been showing upward trends in their statistics.

ENTERTAINMENT LEVEL

In both cases, entertainment is quite high, which is why over 100 million Americans keep trying to win money on sports. Not only is it nice to have some extra cash in your pocket, but it is great to be able to make a game more exciting by creating a financial incentive.

Want to make that early season baseball game as exciting as the playoffs or make the Pro Bowl mean something? Having a financial incentive on the outcome can accomplish both of these goals, and take the experience of watching a game from routine to intense!

Sports Gambling vs. Daily Fantasy Sports

3 Responses to Sports Gambling vs. Daily Fantasy Sports