[toc]Earlier this decade, daily fantasy sports (DFS) was the disruptive new kid on the block, progressively making waves in an established industry. Thus, its nascent — albeit modest — association with another game-changer, Bitcoin, is somewhat fitting.
Bitcoin is the most widely known form of cryptocurrency. It also holds the distinction of the world’s first decentralized, peer-to-peer digital form of payment. In existence for nearly a decade, its hold on the public consciousness has arguably never been greater. Recent positive trends in its value helped increase its overall visibility on a significant scale.
FanDuel dips toe into crypto waters
Enter FanDuel, which found a way to marry the Bitcoin phenomena into its postseason NFL offerings. On Saturday, Jan. 6, the site’s Bitcoin Bowl Tournament ($3 entry fee) and Bitcoin Bowl Free Play got underway. Both contests encompassed the four games playing over Wild-Card weekend. These are the first two contests on a major DFS site in which payouts will exclusively be in the form of cryptocurrency.
Both Guaranteed Prize Pools (GPPs) are officially listed as uncapped in terms of entries. The rake the site enjoyed on the paid-entry Bitcoin Bowl Tournament has been the subject of increasing discussion. When registration closed, the Bitcoin Bowl Tournament boasted over 42,000 entries.
Considering Bitcoin is a commodity that sees fluctuations in value, the exact dollar equivalent of the prizes being awarded in either contest won’t be determined until payout. Based on FanDuel’s typical settlement time frames, that would presumably come late on Sunday evening, Jan. 7.
Low odds but solid payouts
However, if Bitcoin’s recent performance is any indication, winners in the paid-entry contest stand to see a solid return on their $3 investment. The contest pays out:
- 2 Bitcoin to first place
- .5 Bitcoin to second
- .25 Bitcoin to third and fourth
As of Friday, Jan. 5, one Bitcoin was equivalent to just over $16,300. Meanwhile, the Bitcoin Free Play, which only rewars the highest-scoring lineup, pays out 1 Bitcoin to its winner.
If viewed purely from a DFS contest selection perspective, the Bitcoin Bowl Tournament would have to be considered a fun dart-throw at best for those rolling out one — or at most a handful — of entries. Conversely, for those opting to max out the allowable 150 entries, the highly concentrated payout structure requires that one turn a blind eye towards traditional bankroll management strategy.
At 42,000 entries – a slightly rounded-down figure — the Bitcoin Bowl Tournament is paying out less than .0001 percent of the field. The Free Play, which has exponentially more entries and pays out three fewer contestants, offers even steeper odds, but carries no monetary risk.
A likely profitable decision for FanDuel
Utilizing previously cited numbers as a guide, FanDuel’s gamble on Bitcoin just literally began to pay off early on Friday.
Assuming a rounded-down $16,000 figure for Bitcoin’s potential value at the time of payout, the site needed to clear $48,000 worth of entries (16,000) in the Bitcoin Bowl to get into the black. As alluded to previously, it’s comfortably past that mark. In fact, the total amount of entry fees paid stands at more than $125,000.
However, when factoring in the additional 1 Bitcoin in the Free Play contest, FanDuel also needed just over 5,300 additional paid entries to start turning a profit overall on its endeavor. It conquered that milestone a full day before the contest closed registration.
FanDuel is no stranger to thinking outside the box in its marketing strategies previously. As a result, its current dalliance with Bitcoin isn’t surprising. The popularity of both contests also speaks well of the experiment. Given the turnout, additional Bitcoin-based contest offerings in multiple sports on the site would figure to be a virtual certainty.
Crypto wave coming in DFS?
Although the weekend’s contests are a first for a mainstream DFS outfit, there is an emerging subset of smaller industry operators already eschewing the use of traditional currency altogether.
Sites such as Digital Fantasy Sports and No Limit Fantasy Sports/Crypto Fantasy Sports are in the process of or have developed a full array of DFS contest offerings with their own proprietary cryptocurrency as the foundation. The latter company notably boasts former Redskins quarterback Joe Theismann and 10-time WSOP bracelet winner Johnny Chan as official “brand ambassadors”.
FanDuel will undoubtedly continue to derive the overwhelming majority of its business from traditional currency-based game play. However, its initial foray into the cryptocurrency realm appears to be a prudent, forward-looking decision.