I’ve been playing DFS for about four years and one of the best things for the industry is having a few power house sites.
If there is only one big DFS site then they control everything and it hurts us (the players) because they can charge whatever they feel like. The rake makes being profitable hard because now you have to at least win 56% of your cash games to pull a profit as opposed to 51%.
Draftkings was pissing me off because they were buying some of my favorite sites and forcing you to play on their site. It was almost a monopoly, but they will never join forces with Fanduel because it is also too big.
With DFS eSports launching on the scene, there are basically two big dogs. I bet in the future there will be multiple sites you can play on especially if DFS eSports is successful.
But for the time being it’s Vulcun and Alpha Draft, and they are already taking shots at each other to be number one. The battle between these two sites is just like the one I’ve been watching over the years with Fanduel and Draftkings. That’s why I bring this up.
It reminds me of the song “anything you can do I can do better.”
Vulcun started off by raising 12 million dollars and guaranteed they would pay 4 million dollars in contests this year.
Well that didn’t sit well with the people over at Alpha Draft so what do they do?
They guaranteed 5 million dollars in payouts next year and went out and raised five million from private investors (including ex NBA commissioner David Stern) in the last month!
So what does this mean for you?
It means these companies are battling for your business and right now they are using their guaranteed pay outs as the bait to get you to their site.
Since DFS eSports is so new, it ideally means these contest are going to have major overlay. Overlay is a players best friend. It is when a site guarantees to pay a certain amount in a tournament but not enough people join to cover the prize pool.
It basically means the site has to cover the entry fee’s of the players that aren’t playing.
If the prize pool is $1,000 and the entry fee is $10 dollars. The site will typically have 115 entries. If the tournament fills, the site will make $150 on that game (115 entries X $10 = $1150 but they are only paying $1000 and keeping the $150 left over).
But if only 70 people sign up at $10 each ($700), the site will have to pay the remaining $300!
This gives you such an advantage because your odds of winning just increased by 30%.
What else does site competition mean?
The next step Vulcun and Alpha Draft will take could be lowering their rake. As of now their rake is 15%. But since these two are doing everything they can to get new business, watch for lower rake advertisement.
They may drop it to 10% because this is the standard for sites like Fanduel and Draftkings, and I feel like they are mimicking what those sites are doing.
It’s a monkey see monkey do business, and if someone is successful at something, others will copy it.
The other thing to keep an eye out for is other new sites!
Trust me, if these two sites are successful there will be other sites popping up left and right. As of now there are about 20 DFS sites for sports even though most people only know Draftkings and Fanduel.
When smaller sites start coming around, take advantage of them because they have to follow the same legal rules as Vulcun and Alpha Draft.
You have to announce the prize before allowing users to enter and you have to pay what you say you will. These smaller sites will ideally anticipate losing money at the beginning and that should be music to your ears because they are giving the money to us!
It’s a unique business but the fact that two sites are jumping out the gate and fighting each other for our business is huge.
As players, you need to strike when the iron is hot and right now the iron is red and smoking!