What Is Fantasy Sports

Fantasy basketball is 100% safe and legal as the Unlawful Internet Gambling Enforcement Act of 2006 does not mention fantasy sports in its list of prohibited games. The fantasy websites we recommend are safe and legal as they do not even operate in the handful of US states that consider fantasy sports.

Most people have heard of fantasy sports, and millions play it. But let's be honest: Odds are someone in the room with you right now has no idea what it really is or how it works.

Something about putting together virtual teams based on real players -- and then judging the performance of those fantasy teams based on how the real athletes do on the field?

SiriusXM Fantasy Sports Radio is the only 24/7 radio channel exclusively dedicated to fantasy sports. Get expert advice, strategy and information plus hear interviews with athletes, coaches and insiders to help you dominate your league. If you’re new to daily fantasy sports, the first thing I’m going to tell you is that “daily fantasy sports” is a pain to type over and over, so we call it “DFS”. If that was a revelation, this glossary is for you. If you have no idea what “fading Calvin Johnson in GPPs is a great contrarian play” means, you’d better read on. Fantasy Sports Betting Fantasy sports betting is a different concept from traditional sports betting, as you don’t bet directly on the outcome of any sporting events. Instead you create a fantasy sports team and compete against opponents to try and win money. Fantasy sports platforms allows you to manage your own fantasy teams & compete with sports minded individuals. Here's why fantasy sports is worth billions!

Exactly.

It began as a fun game played among friends. But today it's a multi-billion dollar business that has a tremendous influence on real, live sports. Many of the same corporate interests involved in pro-sports have gotten on the fantasy bandwagon (Time Warner, which owns CNN, has invested in FanDuel one of the biggest fantasy sports companies).

Here's a breakdown for the uninitiated.

How does fantasy sports work?

Fans choose from real players in an online selection process, or a draft, to assemble a fantasy team. The players' real-game statistics are compiled and compared to see whose fantasy team has done the best.

Players track how their fantasy team is doing using various web sites or mobile apps. Some players join leagues with friends and compete against only people they know. Others join public leagues hosted by web sites and compete against strangers.

Who plays?

Some 56 million people play fantasy sports in North America. About 10 million of those players are teenagers. About 19% of adult men play fantasy sports, compared to 9% of of women, according to estimates STATS Inc.

And wealthier fans are more likely to play: 16% of people with incomes of $50,000 or more play fantasy sports, while only 10% of people who earn less than $50,000 participate.

A total of $18 billion is spent on fantasy sports annually. By comparison, $140 billion is wagered on real sports and $70 billion is spent in lotteries.

Is fantasy sports legal?

Yes. The Unlawful Internet Gambling Enforcement Act, which Congress passed in 2006, specifically says fantasy sports are allowed under federal law because they are classified as a game of skill rather than a game of chance. The only caveat is that players may not bet on the outcome of a single game or the performance of a single player.

But fantasy sports are banned in five states -- Arizona, Iowa, Louisiana, Montana and Washington. The Fantasy Sports Trade Association is lobbying to change the laws in those states.

Are there regulations?

Right now there really is no government authority that oversees fantasy sports, the way gambling regulators oversee sports betting in Nevada.

The recent scandal involving DraftKings and FanDuel could bring calls for greater government oversight of the industry, if not calls for an outright ban.

How big a business is fantasy sports?

Big. Overall, the industry brings in about $1.5 billion a year in revenue. Most of that money comes from advertising on the sites. Sites such as DraftKings and FanDuel pay out more than 90% of the fees they collect as prize money in order to attract players to the game.

Many of the major media and Internet companies such as Disney's(DIS) ESPN unit, Yahoo(YHOO) and CBS(CBS) have become major players in the business.

DraftKings and FanDuel have each raised about $300 million from investors and have valuations in the billions. Their investors include sports leagues such as Major League Baseball, the National Basketball Association and the National Hockey League, as well as owners of several NFL and NBA teams.

What is the fastest growing part of fantasy sports?

DraftKings and FanDuel have grown rapidly by offering so-called daily games, where players pick a team for only one day, or in the case of football, one week.

Traditionally, fantasy sports leagues competed over the same period of time as the real sports league that they tracked. But these leagues can be time consuming to play.

The Lucrative and Growing Fantasy Football Industry

Fantasy Football is back in full swing — and business has never been bigger.

Number of Fantasy Sports Players in US and Canada:
1988 500,000
1991-94 1-3 Million
2003 15.2 Million
2004 13.5 Million
2005 12.6 Million
2006 18 Million
2007 19.4 Million
2008 29.9 Million
2009 28.4 Million
2010 32 Million
2011 35.9 Million
2014 41.5 Million
2015 56.8 Million

That’s more than a 270% increase since 2003, 2 times the total of 2009, and includes a good percentage of North America.

Fantasy Sports Players as a Percentage of Population (Age 12+):
US Canada
Total 14% 19%
Adults 13% 18%
Teens 18% 30%
Male 19% 20%
Female 8% 5%

Let’s break down those fantasy demographics further:

Sex: 80% Male / 20% Female
Ethnicity: 89% Caucasian
Average Age: 34
College Degree or More: 78%
Full-time employment: 66%
Favorite Fantasy Sport: Football (73%)
Average Time Spent Consuming Sports: 18 hours per week
Average Time Spent Consuming Fantasy Sports: 9 hours per week
Average Fantasy Sports Experience: 9.5 years
Average Annual Household Income: $92,750

Of the 56.8 million players, more than 40 million play fantasy football.

That would be like if every single resident of the following 22 states played in a fantasy football league:
Connecticut
Iowa
Mississippi
Arkansas
Utah
Kansas
Nevada
New Mexico
Nebraska
West Virginia
Idaho
Hawaii
Maine
New Hampshire
Rhode Island
Montana
Delaware
South Dakota
North Dakota
Alaska
District of Columbia
Vermont
Wyoming

Factor in that participants spend an average of $465 a year on fantasy sports, and do the math.

Fantasy football is an $18.6 billion market.

That’s $6 billion more than the current estimated NFL revenue, and 4.5 times the current value of the NFL’s top flight team, the Dallas Cowboys.

NFL Team: 2015 Value (In Billions):

Dallas Cowboys $4
New England Patriots $3.2
Washington Redskins $2.85
New York Giants $2.8
San Francisco 49ers $2.7
New York Jets $2.6
Houston Texans $2.5
Chicago Bears $2.45
Philadelphia Eagles $2.4
Green Bay Packers $1.95
Denver Broncos $1.94
Baltimore Ravens $1.93
Pittsburgh Steelers $1.9
Indianapolis Colts $1.88
Seattle Seahawks $1.87
Miami Dolphins $1.85
Atlanta Falcons $1.67
Minnesota Vikings $1.59
Carolina Panthers $1.56
Arizona Cardinals $1.54
Kansas City Chiefs $1.53
San Diego Chargers $1.53
New Orleans Saints $1.52
Tampa Bay Buccaneers $1.51
Cleveland Browns $1.5
Tennessee Titans $1.49
Jacksonville Jaguars $1.48
St Louis Rams $1.45
Cincinnati Bengals $1.45
Detroit Lions $1.44
Oakland Raiders $1.43
Buffalo Bills $1.4

In other words, fantasy football might be more valuable than the real thing.

Q: How did fantasy go from weekender hobby to big-time business?

A: 2 words – Daily Fantasy.

In 2006, Congress passed the Unlawful Internet Gambling Enforcement Act (UIEGA), which banned online poker – deemed a game of chance – but left room for fantasy sports wagers – deemed a game of skill.

Daily Fantasy Rules:
1) Submit entry fee
2) Select lineup under capped fantasy budget
3) Collect earnings from results
4) Rinse and repeat

DraftKings and FanDuel – the two largest daily fantasy services – will each pay out more than $2 billion in winnings this year.

That’s a big chunk of change.

But with entry fees – from $2 to more than $5,000 – generating $2.6 billion this year, bearish projections continue.

Bearish Revenue Estimates Per Year (In Billions):
2015: $2.6
2016: $3.66
2017: $5.16
2018: $7.29
2019: $10.27
2020: $14.4
…
2025: $77???

In comparison, online poker and casino projections only make up about 5% of fantasy projections.

Bearish Revenue Estimates Per Year (In Millions):
2015: $150
2016: $170
2017: $214
2018: $443
2019: $606
2020: $663

Sports books in Vegas are taking a hit, too.

Cbs Fantasy Football

NFL Week 1 Entry Fees:
FanDuel/DraftKings: $60 million
Las Vegas: $30 million

Investors Have Taken Notice

Total VC Raised : Investors:

DraftKings – $426 million : Fox Sports, Major League Baseball, the National Hockey League, Major League Soccer, Madison Square Garden Co., Legends Hospitality, Atlas Venture, DST Global, GGV Capital, the Kraft Group, the Raine Group, and Wellington Management Co.

FanDuel – $363 million : KKR & Co., Google Capital, Time Warner Investments, Turner Sports, the National Basketball Association, several NBA owners and NFL owners, Shamrock Capital, NBC Sports Ventures, Comcast Ventures, Bullpen Capital, Pentech Ventures, and Piton Capital

DraftKings and FanDuel are also among the top 5 spenders in TV ads [from 9/14-21/15].

Company Total Spent National Airings
1)Warner Bros. $18,277,265 3,303
2)DraftKings $17,818,044 2,571
3)GEICO $15,883,842 5,160
4)FanDuel $14,729,168 2,576
5)Verizon $14,286,524 1,234

Yes, those ads ARE on all the time.

So what are the odds you collect from that $2 billion pot?

Player Total Wins/Day
Top 10 Players 883
Top 100 Players 330
Remaining 20,000 13

If you’re not a top fantasy player in the world, you’re probably not winning much.

What Is Daily Fantasy Sports

The cut-off between winners and losers is vivid and steep.

But that’s probably not stopping anyone too soon.

So, what’s your lineup looking like this week?

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