For a small but growing number of people, fantasy sports is a job.
The new generation of fantasy player isn't playing the annual, once-a-year league with some friends. They're playing a new brand of daily fantasy sports that's more intense, more frequent, and (potentially) more lucrative.
One player we spoke to, Alex from Ft. Worth, deposited $300 to play with on the daily fantasy website Draftstreet in 2011.
In the last 12 months, he has made $95,000.
If you're familiar with early-2000's online poker, daily fantasy sports works in a similar way. There are dozens of daily leagues with different buy-ins (from $2 to a few hundred dollars), different draft styles (salary cap, snake draft, etc.), and different sizes (2 people to 550 people).
You choose your league, pay your entry fee, pick your team, and collect your winnings if your team gets better stats than the other teams in your league. And then you do it all again the next day.
The league selection screen looks like this:
"It doesn’t surprise me that you see these guys quitting their jobs, because it’s a skill game," Draftstreet CEO Brian Schwartz says. "And the more time you can spend doing your research and coming up with the best strategy the better you can do."
Alex says he spends forty hours per week during basketball season researching and playing fantasy sports. He tries not to listen to any pundits or commentators, with the idea that using his own assumptions and strategy gives him a point of separation with his competitors.
"At first it was more of a recreational thing," he says. But after he got his first $1,000 check two years ago, he realized he could professionalize his approach. He's now comfortable risking $2,000 a night.
He takes money out of his Draftstreet account every week — a paycheck of sorts. He's a married 34-year-old with two kids. While he still has a day job at his family's business, fantasy sports is his primary source of income.
"The best part of what I’m doing is it’s repeatable," he said. "I’ve never had a negative month in two years."
Daily fantasy sports — and players treating daily fantasy sports as their jobs — is a growing subset of the larger fantasy sports market.
"It’s all about instant gratification," Schwartz says. "We aren’t trying to replace season-long. This is a different type of fantasy product."
Schwartz told us that the revenue and user base of Draftstreet has doubled in the last year.
The number of "six-figure guys" on his site — those who make $100,000 a year — was around five or six total last year. Schwartz says it'll be ten times that by the end of 2013.
The online poker comparison we made earlier applies on multiple levels. Draftstreet collects a small percentage of entry fees from leagues with buy-ins more than $5. There are big one-off competitions for casual players (like THE $2,500,000 FANTASY FOOTBALL CHAMPIONSHIP!), and small, higher-stakes leagues for professionals like Alex. The only difference is that fantasy sports is legally acknowledged as a game of skill (poker isn't), and is thus totally legal.
Fantasy sports has long been positioned as a hobby — a convenient way to reconnect with friends or have a rooting interest while watching the games on Sunday.
But the rise of daily fantasy (Fantasy Sports 3.0, if you will) has brought along a whole new set of expectations for what fantasy sports can be.
