Daily Fantasy Sports vs Traditional Betting
Daily fantasy sports (DFS) and traditional sports betting have a lot in common. They are both popular forms of gambling for example, and they also require similar skill-sets and knowledge bases. It's possible to gain an edge and make long term profits with both as well.
In addition to the similarities they share, however, there are also some key differences between the two. The commissions charged are different for one thing, and in DFS the opponents are other human players rather than bookmakers. The laws that govern the two activities are different too, or at least they are in some regions. This point is particularly relevant if you live in the United States, due to the complicated laws regarding sports betting as you're probably all too aware of. The legal situation is a lot clearer with daily fantasy sports.
On this page we explore what we believe to be the biggest similarities and differences between daily fantasy sports and traditional sports betting. This should help you to make a more educated decision about which one you'd rather pursue.
Keep in mind that daily fantasy sports and traditional sports betting are NOT mutually exclusive. You can easily enjoy both hobbies at the same time. In fact, any experience you gain in DFS can improve your betting abilities, and vice versa.
Smart Players Can Profit from Both
One of the better written books about gambling is How to Make $100,000 a Year Gambling for a Living by David Sklansky and Mason Malmuth. In that book, the authors point out that there are only a handful of gambling activities where you can realistically gain enough of an edge to make a living. These are as follows.
The book came out long before the advent of daily fantasy sports, but had they been around when the book was written then the authors might well have included them.
One of the observations in the book was that a smart, skilled sports bettor can make more money as a professional gambler than anyone specializing in any of the other forms of gambling on the above list. That may be up for debate, but it's a fact that you can make money from sports betting if you know what you're doing. The same applies to daily fantasy sports, and they have the potential to be just as profitable as traditional sports betting for most gamblers.
Both DFS and traditional sports betting offer the opportunity to profit from your knowledge of a particular sport, or sports. That's not enough by itself, as you need to be able translate that knowledge into mathematically advantageous strategies, but consistent profits are possible with the right approach and a willingness to learn.
In other words, if you're smart and willing to work hard, you can earn a living from daily fantasy sports or from sports betting. Remember, as we already mentioned, you don't even have to choose between the two. There's no reason why you can't be profitable at both.
Daily Fantasy Sports Is Legal and Safe
Sports betting is completely legal in many parts of the world. Certain regions, such as the United Kingdom for example, have bookmaking shops where you can bet on any sport you want. In many other places, online betting is 100% legal and fully regulated.
If you live in the United States, however, your situation is somewhat different. The only way to bet on sports without having any cause for concern is to use Las Vegas books. This is legal, and perfectly safe too. There's no need to worry about getting arrested or not getting paid out, as these books operate within the law and pay their winners right away. Betting online is an alternative option, but it's not an entirely legal one.
The gambling laws in America are confusing at best, but we've tried to explain them as clearly as possible on our page covering US gambling legislation.
No American is likely to be arrested for betting online, as the laws and enforcement activities focus on the books and not the people using them. This can still affect you though. If an offshore sportsbook you're using gets shut down by US law then you may lose any money you have there.
Consider, too, what kinds of businesses are willing to operate on the wrong side of the law. If they're willing to take your action knowing that it's illegal under federal law, are they likely to have a strong moral code when it comes to paying out winnings? Maybe some of them will, but surely some of them won't. This problem can be avoided by using reputable betting sites, but it's still something for American sports bettors to think about.
Daily fantasy sports, on the other hand, are legal and safe. These games use the same rules as traditional fantasy sports contests, which have never been legally controversial in the USA. You can play from your computer too, so there's no need to travel to Vegas to participate.
For Americans wanting to get money into action on sports over the internet, daily fantasy sports have a clear advantage over offshore sports books.
DFS & Sports Betting Both Have Commissions
Daily fantasy sports sites usually keep a 10% commission on all entry fees before paying out cash prizes. Here's how that works.
Bookmakers also keep a commission, but the net amount is usually lower. Here's how that usually works.
The net effect of this difference is that you'll need to maintain a higher winning percentage in order to break even in daily fantasy sports. You need a roughly 52.4% win rate at sports betting when laying $110 to win $100. But in daily fantasy sports, you need a roughly 55.6% win rate to break even. This also means that you need a correspondingly higher win rate in order to achieve the same goals for your ROI (return on investment).
Our explanation relating to how bookmakers charge commission is deliberately simplified for the purposes of this article. For a more detailed look at the subject, please read our article on how bookmakers make money.
There's No Bookmaker to Beat in DFS
We've just mentioned how the commissions for DFS are effectively higher than those charged by bookmakers. Although this appears to be an obvious disadvantage of playing daily fantasy contests, when you take other factors into account it's not actually that big a deal.
One factor that should be taken into account is that sports betting involves pitting your skills against the skills of the odds compilers and handicappers that are employed by bookmakers. These people are very skilled, and they are essentially the main reason why the sportsbook business is so profitable.
In the case of the Vegas lines, you're talking about experts with a practically unlimited access to data and its analysis. It's hard to compete with that kind of analysis and win enough wagers to make money on a consistent basis. They set the odds and lines with such efficiency that it's incredibly difficult to gain an edge over them. It's possible, but it's very challenging.
When you enter a daily fantasy sports contest, you're facing other people just like yourself. Some of the opponents you come up against might be more skilled than you, but they won't all be. In fact, many of them will be not very good at all. You certainly won't face many opponents who are as hard to beat as the bookmakers.
In this respect, daily fantasy sports contests resemble poker games. If you're one of the best players at a poker table, you can consistently put yourself into positive expectation situations and win money more often than you lose. The same applies to being one of the best fantasy sports players on a site.
Both Activities Might Be Addictive
Gambling of any kind can be a curse to people with behavior control problems. The science behind gambling addiction is clear, and it's all to do with the human mind and the biochemistry of the brain. Without the right levels of self-control, it's entirely possible to create a dependency on the highs and lows of gambling.
This a very important point to note. The internet is rife with horror stories of people whose lives have been ruined by gambling, and you don't want to be one of those people. If you're someone who has quit gambling on sports because of your addictive personality, daily fantasy contests are not a safe alternative. If you can't control your impulses when betting on sports, changing to another form of gambling is not going to help.
Gambling addiction is similar to alcohol addiction. Alcoholics can't get their drinking under control just by switching from whiskey to beer. It just doesn't work.
Lots of people can enjoy gambling as a hobby, but many others can't. If you're in the latter category, just stay away from traditional sports betting AND daily fantasy sports. The potential misery isn't worth it. If you think you need help, then do something about getting that help. Life is precious, and every moment you spend as a slave to an addiction is a moment of possible freedom wasted.
We've shown that traditional sports betting and daily fantasy sports have some things in common, and there are also some differences between the two activities. Each has its own advantages and disadvantages.
An experienced sports bettor may feel much more comfortable sticking with what he knows. An American may be happier playing daily fantasy sports due to the clearer legal situation. There's no right or wrong here, and it's a simple matter of personal preference. We don't recommend one over the other.
What we do recommend, though, is that you at least give daily fantasy sports a try. You might not like it, but you might just love it.
Author: Brad Johnson
Updated: September 2015
Related Fantasy Sports Articles
- 76ers’ Ben Simmmons Officially Ruled Out for Remainder of Season
- Leicester City Fires Manager Claudio Ranieri One Season After Title Win
- Macau Government Continues Rowing Over Casino Smoking Policy Changes
- Florida Bill to Expand Gaming Gets Revision Ahead Of Second Committee Vote
- Vegas Announces Substantially Lower Bad-Bet Write-Offs for 2016