Fundamentals of DFS Wagering I

Betting on Daily Fantasy Sports is substantively different that betting on an individual football or baseball game.  The obvious way is that you choose a handful of hitters rather than a single team to win, but there is more to it.  Because most people have, at least, a basic understanding of how betting on a game works, it's a fine place to start explaining how Daily Fantasy Sports works.

There are two methods you can use when betting on DFS:

The Classic Betting Method

When you bet on a single game, the two outcomes are fairly self evident: Either you Win or You lose.  One can approach Daily Fantasy this way, and I believe the great majority of new players do.  You field a single roster, you lay your money down, and if your guys outscore their guys you win.  If not you lose.  Besides the structural difference, it is important to not that the payouts are skewed versus traditional gambling.  Traditionally, the loser of the bet pays a little extra (called something like the Vig, or the Bump, or the Juice - the house's share).  In DFS, both teams push a portion of their bet to the house (10% is common among the big sites, Fan Duel & Draft Kings), so the amount won will be less than double your money, unless your in some kind of multi-team event where the number of winners is smaller than the number of losers.  This is a fine way to put your toe in the water.  It's simple, clean, and understandable.  If you were to bet $5, either you would walk away with $9 or walk away with nothing.  This is the way you can win more money faster provided you win, but with that greater reward comes greater risk.

Classic Betting Method Pros:

Easy to understand

Higher possible rewards.

Classic Betting Method Cons:

Higher Risk,

Losses hurt your pocket book more

The Multiple Line up or "Spread" Method

Using the Classic Approach begs the question: Why don't you just bet on the outcome of the game itself?  Aside from DFS being legal and gambling being illegal, there is no good answer to this question.  The DFS game requires a lot more knowledge and commitment than simply picking the Patriots to beat the Steelers.  And if you start playing, you'll notice that most of the hardcore DFS players can toss out well over two dozen challenges per game day section.  Why are they doing that?

By placing multiple lineups or games, they are spreading out their risk of losing.  That's why I call it the "Spread" method; it reminds me of Spread Trading in Options.  What they are doing is trading in the Two outcome High Risk/High Reward concept for a 4 or 10 or even 50 outcome concept.  They know that if their lineup stinks, they will lose no more than they would in losing a single bet of the total value, but they like the new outcome possibilities: Win All, Win Some, Lose Some, Lose All.

The chances of a Win All or Lose All outcome occurring drops little by little with each additional wager.  And as DFS is primarily a game of probabilities, they understand that if they can set there lineups just well enough to win 60% of their games over the course of a season, they will come out ahead in the end.  And most days will see them either win a little, or lose a little.  I've spent over a month doing this and I can tell you that just uinder 3 out of 4 days, I finish + or - $2.  On the days, I pick a pitcher who scores negative points or too many batters with zeros, I lose it all, When my team is merely substandard, there are always a couple of games I pick up versus teams with truly awful days, which can turn $20 of betting into a loss of $8 to $10.  When I pick a decent team, the outcome hovers around 50/50.  When I pick a good team, I win smaller amounts, putting me up small but noticeable amounts.  When I truly hit a home run with my picks, I take down usually all with may be one or two stragglers, who just did a little better, keeping me from the full "Classic bet" outcome.  Playing multiple lineups is a way of mitigating your losses, and leveraging a smaller possible loss versus the chance at a bigger possible win.

Spread Method Pros

Acts as a hedge against losing everything in a single night
Allows you to accumulate game experience rapidly.
Allows you to earn loyalty points within the site, which earns you free contest entries and your deposit bonus

Spread Method Cons

Cost more, each bet costs a minimum of $1, so the greater the hedge the greater the cost

Your return on every wager won will decrease (10-20% would be very good)

So what should you do? There is no simple answer here.  You should be familiar enough with Spreading your bets to understand the difference between placing one $10 bet versus 5 - $2 bets and 10 -$1 bets:

You probably will do, what I do, which is a little from each column.  Depending on your mood, your confidence in lineup created, or the day's particular matchups, you may decide that this is Big Risk/Big Reward kind of day or not.  But glancing at the huge number of multiple bets placed by hardcore daily players, the Spread Method concept should definitely be in your arsenal.