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Fantasy Sports Games Played for Real Money: Is it Gambling? (9/25/09)

 

I’m not sure how many of you are playing the daily fantasy contests that are popping up around the web, but I got into a conversation with someone recently about whether these fantasy games were considered ‘gambling’.  In my opinion, they are absolutely gambling and as a smart gambler, you better treat them as such and heed the dangers that lurk within these fantasy gambling games. 

The guy I was discussing the matter with based his argument on the fact that these were games of skill and were therefore not gambling.  He even went as far as to say the goverment was even on his side, since they also consider them ’games of skill’ and even made them legal to play.  I had to disagree with him, the government is just wrong here.  By the way, the government is the very same entity that brings you the various state lotteries.  You think that isn’t gambling?  Is there any skill at all to the lottery?  But it is legal, right?  How about betting on real basketball games, is that gambling?  Is it legal?  Does it require skill and work to analyze matchups to determine a great betting opportunity?  Just because there is an issue of skill involved in something, that doesn’ t eliminate it from the category of ‘gambling’.   Analyzing and betting real NBA games requires just as much work as analyzing matchups and choosing a fantasy team to bet on.  Exact same skill, one is legal, one isn’t.

So what makes one legal and the other not?  Is it the ‘chance’ or ‘luck’ factor?  Is it the fact you can lose a real money bet on a last second fumble, miracle useless last second 3 pointer or missed kick?  Doesn’t that happen in real life AND in fantasy contests?  Maybe Gerald Wallace gets a concussion on the opening tip, you lose him and your fantasy team crashes and burns.  Unlucky?

My point here isn’t to decide the legality of fantasy betting versus real game betting or whether the government draws arbitrary definitions in their ‘game of skill’ reasoning.  My point here is that they are both gambling.  So what should regular gamblers take away from this?  That you better watch the things that would normally beat you as a gambler – THE JUICE.

I’ve bet on sports for a long time.  I even had periods of time where I supported myself solely through sports betting.   After thousands of bets, I’ve learned that it isn’t the last second field goal, the unexpected fumble or miracle 3 point shot that causes a gambler to lose.  Those things all even out in the long run.  I’ve probably won just as many bets in the last minute of the game as I’ve lost.  The thing that never evens out is the juice that you pay on your bets.  It grinds you down in the long run and if you don’t have some advantage against your competition, the juice will slowly make you a losing gambler.

From one gambler to another, I want you guys to realize the juice you are paying with these fantasy games and also how hard it is to overcome that handicap.  If you guys realize that handicap and think you can overcome it due to some other edge that you have over the competion, then by all means go for it.  But if you don’t have an edge or you don’t put in the necessary work to acquire that edge, then the massive juice on these games will beat you.

Consider this:  regular sports betting in Vegas requires a bet 11 to win 10 proposition, which equates to needing 52.4% winners to break even.  Sounds easy right?  But how many of you guys can truly beat that percentage over an entire season?   A majority of the bettors can’t, that is why Vegas and your local bookies thrive. 

Now consider a site like Snapdraft.com ( I hate to single them out, but what they are doing is wrong and just shouldn’t be allowed).  Snapdraft.com offers a bet 10 to win 6 proposition on their games.  They rake 20% right off the top.  It takes 62.5% winners just to break even at that site.  No matter how good you think you might be, myself included, you cannot beat that juice over a season.  You will lose.  For example, say you decide to invest $200 and make 20 bets on Snapdraft at $10 each.  You have a good night winning 11 bets and losing 9 bets.  Pretty good record, you won more than you lost, hitting about 55% winners.  There are guys in Vegas that would kill for a 55% record, and would also be very rich with that kind of winning percentage.  But what was your bottom line on these fantasy games?  You LOST $24.00 or about 11% of your $200 investment.  Getting the picture now?

I’m not telling you guys not to play, I’m simply telling you to be smart gamblers.  Shop around for the best commissions.  Keep an eye on the bottom line and the juice.  No matter how slick some of these fantasy game sites look, you have to remember that it is still gambling and you better treat is as such. 

Good luck.

 

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