Crash, Burn, and Fatal Error: Yesterday’s Happenings in DFS

Written By PlayPicks Staff on September 15, 2014 - Last Updated on June 27, 2018
FanDuel

Yesterday was quite a day for the DFS scene. About forty minutes before rosters locked, there was a crash over on Fan Duel’s end and there was a lot of grumbling about it. Many of you may have seen the message that said something along the lines of the app is loading slowly if you were using it at the time, while those of you on your lap tops probably did not see anything at all because the site would not let you get on to add more rosters or make last minute changes. Seeing an opportunity to seize on a competitor’s mistake, if you were one of those burned, Draft Kings customer experience rep Jon “FatalError” Aguiar fired the most recent shot in the DFS war by promising anyone who cashes out their Fan Duel account and transfers it over to DK a 25% bonus if they do so by Wednesday. If you did not already know the battle between Draft Kings and Fan Duel is definitely at a fevered pitch and we will discuss later if that is a good or bad thing, but yesterday was a significant loss for Fan Duel

For what it is worth, I thought Fan Duel handled it properly at the time. Much as they did when this problem happened for baseball a few weeks back, They offered to buy back the entries of anyone who wanted to cancel them if they e-mailed support promptly and requested to do so. I did not really think anything was wrong with that at the time and I still do not. While I was watching the twitter roll later in the day though apparently others had a different take on it. Check out this exchange from a few daily fantasy sports insiders:

 

 

 

Let that sink in for a minute. If you were playing in today’s Sunday Millions, you basically were playing against maybe a few thousand entries owned by Fan Duel. It’s a tough situation, because I see both sides of the argument. I will present both sides of the argument and then let you decide which side of the fence you are on.

 

Pros:

 

The tournament had already started, so taking out the entries that were live would be nearly impossible. I do not know the computer science it would take to accomplish something like this, but suffice it to say the capability to do so was not built into the site. Cancelling the whole tournament is not an option, because there were tens of thousands of us that had our rosters set and were looking forward to taking our chance at $1.25 million. It would not have been fair to us to cancel the whole thing. I know I would be livid if they lowered the prize pool by canceling entries and making it a smaller tournament, so that option would be out. Not allowing those line ups to be canceled would also be a huge mistake as it would burn those who got screwed. With all other options exhausted, the one which I consider to be the least of all evils is them buying the entries back as they did. The integrity of the tournament stays the same. The payouts remain, the prize structure, and even the finishing positions of everyone in the tournament as if those rosters were perfect. If anything it actually made it a softer spot for the rest of us. Those who canceled their entries did so because they had a last minute change they wanted to make. While some of that may have just been tinkering there was probably a bunch of it that was to get an injured player out or change a punt because the starter is playing. If those line ups were so great then the guys who made them would not have wanted them canceled. Fan Duel did not make these line ups. No one who worked there did and no one with any special knowledge of the pricing or percentages did. Every one of these line ups was made and entered by a player just like you. Some may be better or worse at making those line ups, but although Fan Duel owned it at the end of the day, it was put into play the exact same way as every entry you put in play. The spot you finished in this tournament would be the same as the spot you finished if there was no software problem and anyone crying otherwise is really just sour grapes.

 

Cons:

 

Well, I think RotoLineups summed it up best. It just feels kind of shady. There’s no way to know the actual number of entries they bought back, but they sold the tourney out, so they made $186,775. If they bought back less than the 7,471 entries over break even they had then it was still a profitable tournament. If any of the entries they did buy back wind up in the money they also are not going to have to pay that out now. It is not an ideal situation and is definitely a black eye on one of the biggest tournaments they have run. Some people feel like it is wrong that you are losing to “Ghost entries”. Competing against the site instead of other live competitors is kind of a gray area with respect to the laws that allow and govern DFS sites. The site is at fault for the server errors that caused people to have trouble submitting and updating rosters before line up lock, so why should they be able to potentially profit from it? Every site already does not allow their employees to compete in their games to avoid any inkling of impropriety, so why does that ban not extend to the site too. Without those ghost entries maybe someone would cash that bubbled, or vice versa. There’s nothing really improper about it, but like RotoLineups said, it just feels shady. Even though the reasoning is understandable and something had to be done to appease all parties while ruffling the least amount of feathers, it still does not feel Kosher.

 

Industry Shaker

 

Let’s face it, Fan Duel is still much larger then Draft Kings. FanDuel filled the Sunday Millions at the increased prize pool of $1.25 million with plenty of time to spare on Sunday. In fact they threw another $100K Bomb at the same buy in level out and filled that too. I would not be surprised to see it go to $1.5 Million next week and fill that one just before kickoff. The numbers are absolutely staggering.

Draft Kings is definitely a threat to FanDuel now though. They may not be filling every one of these big tournaments they are throwing out there at present, but they are not far off and they are offering the people two big things that FanDuel is not. The first one for the players is Overlay. The Millions on DK only drew 32,031 @ $27 level for a total of $864,837 collected. Even though they doubled the prize pool for the $27 level, they again were short of filling it and breaking even. There was about a 13.5% overlay here again which is slightly lower than they had opening weekend at this buy in level. They halved the prize pool for the $200 level down to $500K and came within only $10,000 of making that break even, which is a big improvement over last weekend. While the overlay on the big tournaments is shrinking, there’s still overlay.

The other reason that Draft Kings is stealing market share (Besides aggressive recruitment like the switching bonus above) is the user interface. That’s technical jargon that simply breaks down to, which site do you enjoy using more. DraftKings has upped the bar with the visual look and feel of their site, as well as ease of use, and the overall customer experience. Many feel the site is more modern then the clunky HTML look of the Fan Duel site. If you click on the Beta tab above the player replacement box in the upcoming games section of your Fan Duel account you will see that they even realize it and have started working on some upgrades. They are making it easier to cross enter games in multiple tournaments, because many were saying Draft Kings made it easier then Fan Duel to do so. DraftKings also took the side of the player’s in the whole Championship weekend despite and scored a lot of points for being the one who moved their event to allow the players to compete in both. I’m not sure who is handling PR over at FanDuel, but after they mandated appearance by the finalist or forfeit half your winnings they looked like they were being petty and trying to bully the players into coming to their finals. DraftKings came out looking like the people’s champ for listening to the players and moving there’s. That whole fiasco left a bad taste in a lot of people’s mouths. Add in the recent problems from today and the aggressive approach of DraftKings in recruiting and if they are not careful, the gap between #1 and #2 could continue to close at an even faster rate.

 

Competition      

 

In any industry competition is good for the consumer. Game Theory teaches us that when there is an established leader with no one pushing them (Monopoly) then the industry gets stale. This is because there is no need to innovate and improve if you are just printing money with no end to that in sight. The rapid rise of Draft Kings and the threat that they pose to Fan Duel’s massive share of this market has finally lit the fire under the people at Fan Duel to improve the product. The prevailing thought around the DFS community right now is that Draft Kings is the site that has the player’s best interest at heart and that is a very slippery slope that Fan Duel is on at the moment. In an industry where everyone wants to be the biggest and best before some of the inevitable competitors start dipping their toe into the waters, now is not the best time for them to be off their game. In the overall schemes of things I do not think this little hiccup with the site crashing and the outrage some have at the way they handled the refunds is going to really move the needle on player acquisition or dollars wagered all that much. Draft Kings tech team has some problems as well with their scoring freezing up in recent days, so they are not immune to some of the same issues. One little thing is not going to be the downfall of Fan Duel and those predicting their demise are incredibly premature. DraftKings is reaching for that brass ring and they are pushing hard which is only good for the industry. They have been able to accomplish in a few short months what the players have been asking FanDuel to do for years. They pushed them into moving the user interface to the next level, which is a good start for them in repairing the relationship with the players. While I think FanDuel’s image is unfairly tarnished by all the missteps they have had recently, none the less they are starting to get the reputation as unfriendly to the users. Draft Kings is trying hard to play this up and use it to lure players away from FanDuel and into their ecosystem. Now would probably be a good time for FanDuel to do something nice for the players to show them they are appreciated. Putting a checkmark in the win column for them would be a good idea right about now as it seems the recent fumblings are starting to take a toll. FanDuel is still the largest and most widely used DFS platform, so like I said the talk of its demise are overblown. On the heels of acquisition spree by DraftKings and the aggressive push for your fantasy dollars that the boys from Boston are making, these little mishaps are piling up for FanDuel and if they do not stop then maybe the flood gates will open and the mass exodus they see could change the DFS landscape as we know it.

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