SUPERLOBBY BLOG - NFL WEEK 10

A Giant, New York-Shaped Spanner in the Works

The weekly Daily Fantasy Sports dramabomb has exploded, with the New York Attorney General demanding that DFS sites cease and desist from operating in the state.

Evidently conflating banning DFS with saving the world, AG Eric Schneiderman’s statement concluded in a blaze of self-importance: ‘Today we have sent a clear message: not in New York, and not on my watch’. The hubris was laid on so thick, you could almost taste it.

The AG’s performance sounded like he had lost a bet, and his forfeit was to give a speech that Aaron Sorkin would reject for being too smug. DFS operators were unimpressed; FanDuel’s response was particularly scathing: ‘[...] after the Attorney General realized he could now get himself some press coverage, he decided that a game that has been around for a long, long time is suddenly now not legal’.

Thus far, FanDuel, DraftKings, and NY-based Draftpot’s stance has been steadfast - although a cynic may suggest that they have little choice given that the implications of a capitulation. LegalSportsReport.com has reported that Vantiv, a key payments processing partner to major DFS operators, has further muddied the waters by requesting that the sites comply with the AG’s demand.

The sites are not stupid - they are all-too aware that New York may well be the lead domino. Of course, the mass pull-out from Nevada was a blow to the operators, but the New York resolution will doubtless be more impactful. Not least because, as LegalSportsReport.com notes, ‘New York’s legal definition of gambling is echoed in several other states’. And that is before we even consider its impact on the numerous high-profile sponsorship deals between operators and NYC sports franchises and venues. This is a fight that FanDuel, DraftKings et al will feel they need to win.

As usual, while the suits continue their mud-slinging and public rhetoric wars, the players are the ones that lose out. New York-based users will be concerned as to the safety of their funds - plenty will have already been scarred by online poker’s account-freezing Black Friday. Many will vow to never re-deposit, and others will eschew their usual bankroll management tactics in a ‘go big or go home’ strategy before they get locked out. There is a certain irony in the fact that the Attorney General’s public decree that DFS is gambling will undoubtedly result in some players adopting a higher-variance strategy.

For the umpteenth time since October’s insider information accusations started a remarkable chain of events that threatens a thriving industry, the DFS world is left with more questions than answers. The uncertainty is good for nobody; not the operators, and certainly not the players.

The SuperLobby NBA Lowdown has Landed

It took a week longer than we had hoped, but we are very proud to unveil the SuperLobby NBA DFS Lowdown. It is free of charge, and full of the sort of insightful data and analysis that you have grown to expect of our Monday morning NFL Lowdown.

We have grown accustomed to the sight of DFS operators offering significant overlay on their Sunday NFL contests. Indeed, in the NFL season to date, only FanDuel and DraftKings have been in the black consistently. Yahoo has flirted with profitability - even posting a solitary positive-revenue NFL GPP Sunday in October - but on the whole it is has been a lot more going out than coming in for the smaller operators.

Early indications are that things are a whole lot different in NBA GPPs.

FanDuel and DraftKings have slipped straight into double-digit positive revenues, while Yahoo has enjoyed back-to-back Effective Margins of over 5%. Mid-level operator Draftpot has also broken its duck, with an impressive opening week Effective Margin of 5.8% followed by last week’s -1.7%.

In general, the trend has been towards smaller GPPs than in the NFL. This results in less overlay, and more operators posting revenues that suggest sustainability. Of course, we are just a couple of weeks into the new season, so we are not ready to leap to any conclusions - not least because of the giant, New York-shaped spanner-in-the-works.

Make sure that you check out the SuperLobby Lowdown to keep up to date with all the big NFL and NBA numbers and analysis.





SuperLobby Stats

$ 7,250,344 of overlay available
$ 8,195,630 of guaranteed prizes
$ 1,700,598 of entry fees in play
244,772 entry places filled

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