To understand the concept of fantasy sports, it is important to first understand plain-old fantasy sports, because they have been around for a longer time.
A fantasy sport is a game where the participants assemble imaginary teams (it could be on paper, or using baseball or basketball cards) using real players from a different professional sports team. So, for a fantasy English Premier League team (soccer), you could have one defender from Aston Villa, a goalkeeper from Manchester United, and a mid-fielder from Liverpool FC, etc.
Everyone else in your league does exactly the same thing, and then your teams compete against each other. So, how do you decide who wins? Well, there is a scoring system based on points for certain actions.
For example, a goalie stopping a goal is 5 points, and a midfielder throwing a pass is 4 points. Whichever team has the highest score at the end of the game, wins.
How does fantasy sport work?
In the virtual playfield, there is a player selection process, also referred to as a draft, in which you create a virtual team from the players that you think are good. The statistics from the real game are then compared and compiled.
For example, in the real world, after the end of the week’s play, 5 players from 5 different teams performed the best. In the virtual world, you had those 5 players in your fantasy team. Put two and two together, and you have had a wonderful time at the weekend’s play!
Through apps and websites, you can track statistics of your players, and keep a check on their performance. There are usually two types of leagues in fantasy sports: one in which you can compete against friends and people you know, and the other in which you compete against strangers (Public Leagues).
That is just the front-end of things. At the backend, you have powerful daily fantasy algorithm software that is either built by the owners of the site or purchased as a white label (made someone else’s produce their own by customizing). Several free white label software is available on the internet which you can use to create your own version of a fantasy site. But that is a discussion for the tech-savvy.
Who gets to play?
In North America alone, a total of 56 million are involved in the game. 18% of those players are teenagers. Adult men playing fantasy sports account for about 19% and 9% are women.
Players are based on income levels. Players that earn more than $50,000 account for 16% of the players, while only 10% of players with lesser incomes participate in the game.
The point being is that fantasy sports get people going.
Actual vs. Fantasy Sports
Real life or traditional sports usually occur over an entire season. For example, if you and your friends draft teams in September, then you would not be able to find out who won until the season is over in January. This also means that you are stuck for the whole season, with the same players that you drafted at the beginning of the season unless there is a chance for a trade.
Daily fantasy sports, like the name suggests, is different. It does not last a whole season. It simply lasts a day. The daily fantasy football draft software helps you pick your players in the morning, and by the time the games are over in the afternoon or evening, you will know who has won.
Another difference between the two is that, while regular fantasy sports are focused on a year-after-year league basis, daily fantasy sports is played online with random competitors that you matched with.
There is also a factor of money. Sports league sites like DraftKings can comprise of hundreds of thousands of competitors, each paying a few dollars to enter. The result is that the winner can end up winning millions of dollars in prizes.
With all the glitz and glamour of this online sport, there is bound to be some criticism. The next section will debunk some of the misconceptions regarding fantasy sports.
Fantasy Sports Statistics
The fantasy sports industry is not short on cash, raking an annual revenue of $1.5 billion. Advertising is a major source of that revenue. It makes sense because advertising helps attract an audience. Collectively, both DraftKings and FanDuel spent 90% of their prize money just to attract players to the game.
But players are not the only thing Fantasy Sports companies have got going on for them. Media outlets like Disney, Google, ESPN, and CBS are major corporate partners in the leagues.
As far as investors go, they have the National Hockey League (NHL), the National Football League (NFL), and Major League Baseball (MLB), who has invested about $300 million into both DraftKings and FanDuel, making their valuation go up to billions.