Monday, November 10, 2014

A Skill Gambling Game's Competitive Edge Has Always Been Clear

Using your mind and your competitive instinct to win something or get ahead is as old - as far as gambling skill games go - as life itself. Hundreds of years ago in the UK this primarily fell to horses, but since then competitive chess, backgammon, scrabble, video gaming and dozens of other avenues have entered the fore.

Most recently, though, I do not think there's been a game quite like Fantasy Sports. Strat-o-matic baseball could not quite cut it, but today's Fantasy sure does.

According to this article in the New York Times, 41 million people are playing fantasy sports. And they're doing so for money in daily or weekend leagues, unlike the fantasy sports you and I grew up on which were season long affairs. This has not only boosted companies like Fan Duel, it has boosted the leagues which embrace it.
  • Fantasy players consume twice as much sports as the average sports fan, according to Paul Charchian, the president of the Fantasy Sports Trade Association (FSTA). Charchian, who says fewer than five million people played fantasy sports pre-Internet, believes fantasy players have been the impetus for the big-money television deals leagues like the NFL and NBA have inked.
Right now the medium seems at its zenith, although I guess there is room to grow, as long as mistakes are not made.

The knee-jerk reasons given to why this is succeeding are custom: It's new, younger people like it, it's fast action like slot machines, it's marketed well, and on and on. For the most part, I believe that's a bunch of hooey. The primary driver of Fantasy sports is no different than the primary driver of poker or horse betting or any other skill game: the aforementioned ability to win by using your head.

What can stop the growth? The same thing that stops the growth of other skill-based games: Squeezing margins or not knowing your client, so the game becomes a game to benefit the house, not people who are good at it.

Case in point, this thread about "Poker Stars".  The post, from a newbie, is related to the increase in juice at the online poker stalwart, in addition to new "games of chance" that are added (at higher margin, to somehow attract newbies) that a true skill player wants nothing to do with.

"As a "rec" player myself, I thought I'd write a post on what I personally feel about the whole thing. I got into poker almost 13 months ago to wile away my commute here in Japan, which runs to around 2 hours a day. In addition, I have a new baby, so I'm not going out much anymore. My focus is on filling in the time I must be sitting somewhere (train/couch) and unable to do anything else.
Before I played chess and had managed to get into the top 7-10% (by ratings) on My poker goals (which I was prepared to spend some money on) were: Learn new game. Get better. Start to win.

START TO WIN. Why does anyone play any game OF SKILL? I notice you and Poker Stars have an actual legal obligation to prove that it is, in fact, a game of skill right? Unlike, say, roulette. So, just like playing chess, video games,tennis what have you......rec players play to WIN. So, what is the best way to increase "rec" players? INCREASE THE NUMBER OF PEOPLE WHO CAN WIN AT POKER. Does this mean introducing some stupid-ass gambling games like Spin'n'Go? No. If I wanted to gamble, I'd play slots on a casino site for gods sake. Where's the sense of accomplishment in that? "

We can all see horse racing parallels with that discussion. Over the years this skill game - this glorious skill game - has been made harder and harder to win at.

To "increase" business, we've seen jackpot bets at 50% rakes as a means to attract more betting dollars, which in the end, sucks money out of the aggregate pools by reducing churn. It makes the game harder to beat. It's horse racing's version of "Spin n' Go"

And the price? Well, that's been obvious. In 1907 rake was 5%, now in some places it's over 30%. Signal fees are up, pari-mutuel taxes that are in effect after you actually win something are penal.

Short fields have made this problem even greater by spreading more juice over fewer combinations (take some 50 cent trifectas in a five horse field and let me know your ROI at the end of the year).

There's been a sign in front of this sport for a long time now. For skill based players, it's octoganal, and red. 

Right now everyone is giddy over fantasy football. 41 million people, seed cap and series I financing's for websites, money changing hands at electric rates. Like any game, it's only as good as long as players feel they have a chance to win. In a few years let's see if they make the mistakes that some skill games make. If they're smart they will use horse racing as a guide, and never let their customers ability to win erode.


Anonymous said...

Where would fantasy football be if they charged their customers for statistics every day?

BitPlayer said...

I've been reading the book Gambling Wizards you mentioned in an earlier post. One of the threads that jumps out as I read about experts in different games of skill is how much computers have changed each of those games, increasing the level of skill required to be competitive. That dynamic is certainly at work in horse racing, increasing the commitment (in terms of data gathering and analysis) required to win (or even lose slowly), which in turn reduces the game's appeal to more casual players.

Anonymous said...

i apologize but this is off the subject. i want to know about a new gambling game called Post Time Poker. We have been approached about this opportunity and Id like to know if its a scam or illegal?

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