What are Fantasy Sports?
Fantasy Sports (historically called rotisserie or roto leagues) is the commonly used term to describe a competition in which a group of friends put together imaginary teams consisting of real players from various teams in any sport, and compete against each other. The competition is based on the statistical performance of a team’s individual players (or roster) in real games. The competition’s “season” usually runs for the majority of the real sport’s regular season. For example, in NFL, the regular season is 17 weeks long, so a typical NFL Fantasy League would run from week 1 through 16. The league then uses a predetermined format to declare a winner at the end.
The idea of operating a mock league using the performance of real players to determine standings has been around since the 1950s. Due to the rapid growth of fantasy leagues and companies servicing those leagues, the Fantasy Sports Trade Association (FSTA) arose in 1997 to respond to legislative threats. This organization’s vision is to promote fantasy sports business growth.
Where did Daily Fantasy Sports come from?
Daily Fantasy Sports is different from fantasy sports in that players do not have to wait throughout an entire sports season for results (if they won or lost). In daily fantasy sports, results are announced each day.
The origin of Daily Fantasy Sports in its current form begins with the Unlawful Internet Gambling Enforcement Act (UIGEA). The history of this bill is complex, but in a nutshell, it was a federal attempt at criminalizing companies that facilitated money movement to unregulated gaming entities. But the crafters of the legislation wanted to make an exemption for season-long fantasy football, so they put in the following:
the term “bet or wager” does not include:
(ix) participation in any fantasy or simulation sports game or educational game or contest in which (if the game or contest involves a team or teams) no fantasy or simulation sports team is based on the current membership of an actual team that is a member of an amateur or professional sports organization (as those terms are defined in section 3701 of title 28) and that meets the following conditions:
(I) All prizes and awards offered to winning participants are established and made known to the participants in advance of the game or contest and their value is not determined by the number of participants or the amount of any fees paid by those participants.
(II) All winning outcomes reflect the relative knowledge and skill of the participants and are determined predominantly by accumulated statistical results of the performance of individuals (athletes in the case of sports events) in multiple real-world sporting or other events.
(III) No winning outcome is based—
(aa) on the score, point-spread, or any performance or performances of any single real-world team or any combination of such teams; or
(bb) solely on any single performance of an individual athlete in any single real-world sporting or other event.
The early pioneers of the industry spotted a loophole, and DFS was born!
Fanduel was founded in 2009 and DraftKings was founded in 2012. Both companies were funded by venture capital investments. In 2013, Major League Baseball invested an undisclosed amount in DraftKings, becoming the first US professional sports organization to invest in daily fantasy sports. In 2014, DraftKings announced it would acquire DraftStreet and StarStreet and raised another $41 million in investment led by the Raine Group. In 2014, DraftKings entered into a multi-year sponsorship deal with the National Hockey League and Fanduel entered into a four-year sponsorship deal with the National Basketball Association. From then on, along with the mainstream popularity and over millions of dollars in funding, Fanduel and DraftKings are the undisputed leaders in daily fantasy sports.
These companies then entered an intense rivalry phase for market dominance, making deals with high media companies such as ESPN and Fox sports, entering into partnerships with professional sports teams and trying to outspend each other in TV advertisement. While competing to achieve market dominance, they gradually began to work together to establish wider acceptance and legalization of daily fantasy sports. So much so that the companies agreed to merge daily fantasy sports operations at the end of 2016. Why didn’t this happen? The Federal Trade Commission along with attorneys general of California and the District of Columbia opposed the merger claiming the possibility of monopolizing fantasy sports. These companies would control more than 90% of the US market for paid daily fantasy sports. The legal costs they would have incurred if they decided to move ahead with the merger would have been tremendously expensive, and after the two companies had already poured significant financial resources in legal costs in recent years, it is not surprising they decided to back off the merger.
How is Fantasy Factor different from other DFS websites?
Fantasy Factor is the only DFS site with exclusively single-entry contests. This gives players a much better chance at winning any given contest. At many of the bigger DFS sites, multi-entry contests are allowed, so the experienced players with bigger bankrolls sometimes enter the same contest hundreds or even THOUSANDS of times, effectively allowing them to bully the smaller customers. The atmosphere at Fantasy factor is more recreational, with flatter prize pools and smaller contests. Fantasy Factor offers daily freerolls in all sports weekly, so players can give our platform a try.
See how Fantasy Factor is different: