Joined Dec 27, 2015
240 Blog Posts

How Fantasy Sports are Changing the Face of the Economy

What are Fantasy Sports Anyway?

Fantasy sports used to be a simple betting game among sports fans and friends to see who had the most insight into the art and science of the games. A group of guys would get together, watch their favorite teams, and then make good natured bets on the outcomes of not just specific teams but individual players. However, with the introduction of the internet, the game of fantasy sports has changed drastically. Basic strategies include following sports teams and their players carefully in order to increase the odds of picking the best players. If an online fantasy sports fan wants to play fantasy basketball, he would probably spend a little time researching the NBA odds of certain players doing well in upcoming games and make his fantasy team picks accordingly. 

Online, Offline – Is There a Difference?

Online fantasy sports participants combine real players into a virtual fantasy team. These teams are then ranked based on their performances, and the performances of the players within them. The statistics of each game are compiled into points which are then calculated into real cash earnings. The difference between fantasy sports at home and those online is that players can compete against anyone else who is using the same site.

So Who Exactly Plays Fantasy Sports?

Online fantasy sports have fans from all walks of life. Whereas traditional games were typically played by a group of guy friends, the individual nature of the internet presents opportunities for anyone with a computer to participate. Statistics of the top fantasy sports sites indicate that although the majority of users are middle aged men, an increasing number of women, and elderly users have begun to not only just play, but win!

This Can’t Really Affect the Economy, Can it?

Online fantasy sports were one of the fastest rising industries of 2015 with more than 50 million active players using the sites. The most popular sites of the year, FanDuel and DraftKings both saw increases of over 40% of their revenue with the use of successful marketing campaigns which included both online and television commercials using real player testimonials.
Even someone who has no interest in fantasy sports has the opportunity to get in on the action. Many online fantasy sports companies are public, which means anyone can buy and sell their stocks for a profit. This means that anyone who participates in the stock market, regardless of their ability to play fantasy sports can benefit from this booming business.

The Real Stats

The Fantasy Sports Trade Association estimates that 56.8 million people in the U.S. and Canada played fantasy sports in 2015. This number is expected to increase by at least 15% in the next year as emerging companies begin to attract more fans.
Eilers Research is a self-described boutique research firm focused on servicing the gaming equipment, technology, and interactive gaming sectors within the global gaming industry. In 2015 they rocked leading economists worlds by projecting that daily fantasy games would be generating around $2.6 billion in entry fees this year, a statistic that later proved accurate. This is nothing compared to their projected increase of 41% annually, which indicates that online fantasy sports companies will earn around $14.4 billion in the year 2020. That’s the equivalent of earning $2 dollars for every human being currently living on earth.

So What Does This All Mean?

What was once a novelty designated to water cooler conversations or a night in with the guys has become a veritable cash cow. New formats are being invented daily to keep fans guessing and to improve the chances of winning big. With existing companies exceeding all the experts’ financial projections and new companies on the rise with intent to go even further, online fantasy sports are proving to be not only a big business, but one that is booming! Fantasy sports are here to stay.

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  1. pb

    But it is unquestionably gambling…and will inevitably be subject to the same laws applied to other forms of gambling, online or off.

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    • boyaj

      Dude, the stock market is gambling, at least for the large majority of participants. This is akin to a few professional gamblers and bunch of suckers who have no idea what money roll management and consistent strategies are.

      What is laughable and contradictory to me is that the entire financial system was brought to its knees by MBS’s and CDS’s in 07-09, which happened to all be legal, but I can’t throw down $100 on a football game unless I’m in Vegas.

      No one has ever given me a response that makes sense or that I can’t poke holes in, regarding my stock market vs. sports gambling metaphor.

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  2. pb

    Firstly, I believe that ALL gambling should be totally legal and unregulated. But it isn’t.
    As for the bonds you mention, I would like to point out that they had govt (i.e. regulatory) seal of approval. When they turned out to be shiite, the govt stepped in and bought and/or backed them so as not to destroy the illusion that markets are controllable.

    Equities – whatever their flaws, and they have many – are built on the idea of “creating wealth through productivity improvements and proprietary invention”. There is nothing in any type of gambling that is comparable.

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  3. thegametheorist

    boyaj- because you know that the stock market isn’t gamling PER SE. you know it is not all completely luck or based on random outcomes – there is a jive to the markets you can see and feel, even if its unreachable to most. there is a real fundamental company, or at least some, that are producing something and with a long enough time frame, you will be correct.

    you are so right though – I will spend most likely 10x the amount of my biggest trades on partying this year. I don’t make sense- yet ill throw a few hundred into a partying weekend but wont max out my roth at one time, instead choosing to DCA over the year. seemed it helped this year but point is, its compartmentalized in a lot of our brains in order to make irrational decisions seem rational.

    cheers dude

    guess at some point our human brain gives us the scumbag part

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