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The Fantasy Football Millionaire's Club

Fantasy Football
September 3, 2015

It’s the American dreamin more ways than one.

Players winning life-changing money. Companies raking in hundreds of millions of dollars. All from a game based on a game.

Welcome to the world of daily fantasy sports (or in the case of football, weekly fantasy sports), a segment of fantasy football that has exploded in recent years like a boom town during the California Gold Rush.

And just like during the Gold Rush, people are striking it rich.

A Winning Hand

In 2011, Matthew Smith was already making money playing games online. It had nothing to do with football or fantasy football, however. Smith was one of the many people who were part of the online poker craze.

Then, as Smith told me, Uncle Sam stepped in and ruined everyone’s fun.

“Back in 2011, I was playing online poker for a living when the government decided to completely shut down the three biggest online poker sites to Americans,” he said. “About two weeks after ‘Black Friday’ I was still trying to get over the shock of not being able to play online poker when a friend of mine told me about this new fantasy sports site called FanDuel. I had been playing season-long fantasy for a while and was immediately hooked on daily fantasy.”

Smith enjoyed a fair amount of success with FanDuel’s daily baseball games (baseball, in case you were wondering, is that game in summer with the little white ball and everyone standing around all day), but it was at FanDuel competitor DraftKings where he entered the first “Millionaire Maker” football event in 2014.

To say that things went well would be an understatement, although Smith didn’t think he had much of a shot.

“It was crazy,” Smith told me. “After the 1 p.m. games, I really didn’t think I had any potential at all and honestly didn’t even notice the entry that ended up winning. I had 60 entries, and that one just blended in with all the rest. But then in the 4 p.m. games Peyton Manning and Demaryius Thomas started to go completely nuts, and that’s when I thought I might have a chance. Antonio Gates joined in with a TD or two, and my Chargers defense ended up pitching a shutout. All of a sudden I was in first place and just needed to face the Sunday and Monday night games.”

“Going into the Monday night game, the biggest threat to me was the Seattle D needing around 16 points against the Redskins to pass me. The Seattle D ended up not doing much, and the real threat ended up being a team with DeSean Jackson. On the last drive of the game, the guy chasing me just needed a TD from DeSean to beat me, but thankfully they threw it to Andre Roberts for their final TD with 21 seconds left.”

Anyone who has played fantasy football has been therewatching the Monday night game hoping against hope in the fourth quarter for a touchdown. Or hoping against hope against that same touchdown. Watching the clock tick down…

Now imagine doing that with a cool $1 million on the line.

The DFS Boom

Millions of Americans have been imagining that very thing in recent years. The two biggest players in the industry, FanDuel (founded in 2009) and DraftKings (founded in 2011) have become moneymaking machines. They’ve raised hundreds of millions of dollars in venture capital and paid out hundreds of millions in prizes.

And as FanDuel CEO Nigel Eccles told David Dodds of Football Guys, we’ve only seen the tip of the proverbial iceberg:

In terms of team we are now hitting about 100 staff. We’ve invested a lot in building out our product/engineering and customer service teams.We estimate we own about 60-65% of the space, so in total, it’s worth about $600 million in prizes (in 2014). We’ve been tripling in size each year for the last few years. Our intention is to keep growing at that rate. That would mean that in 2015 we would award over $1 billion in prizes.

The wild part? As Adam Kilgore of the Washington Post wrote, DFS sites can thank the same law (the Unlawful Internet Gaming Enforcement Act, or UIGEA) that spelled doom for the online poker industry in the U.S. for allowing them to operate:

The law, which Congress passed in July 2006, prohibits gambling businesses from accepting bets or wagers over the Internet, effectively shutting down online poker and sports betting in the United States.

It might have had a similar effect on fantasy sports if not for the section carved out specifically to make them legal. The law permits “participation in any fantasy or simulation sports game or educational game or contest in which (if the game or contest involves a team or teams) no fantasy or simulation team is based on the current membership of an actual team that is a member of an amateur or professional sports organization.”

The section on fantasy sports included three conditions. All prizes must be established before the contest and not determined by the number of participants. The outcome of the contest must reflect “the relative knowledge and skill of the participants” and be determined by statistical results. The contest cannot be based on the score, point spread or any performance of a single real team or an individual athlete in a single real sporting event.

In other words, running a fantasy sports league for money had been protected by the same law that outlawed online poker and sports betting.

You gotta love Congress.

Granted, there are a handful of states (Arizona, Iowa, Louisiana, Montana and Washington) where state laws prohibit participation in DFS, but for most of the country, the rush is on.

So what’s the appeal? Well, besides the chance to win thousands (or even millions) of dollars, weekly fantasy football leagues offer players a fresh start every weekend. No longer does a bad draft ruin an entire season.

Smith explained. “Season-long and DFS are completely different animals,” he said. “Season-long almost entirely comes down to two things: the draft and injuries. If either one of those doesn’t go your way, then there’s not much you can do to be successful. That’s what’s so great about DFS. Like they say on the commercials, it’s literally a new season every day. And while you can get unlucky with injuries one day, it’s only going to hurt you for that day and not the entire season.”

Just pick a lineup (using a “salary cap”), sit back and hope to strike it rich.

A Real Game-Changer

And for some, the gold rush has completely changed their lives.

As Ryan Kartje of the Orange County Register reported from this year’s Fantasy Sports Combine in Las Vegas (yes, that’s a thing, in large part due to the DFS boom), emcee Matt Iseman shared the story of a man who went from day-trading stock to gauging player stocks:

“This is about winning money,” Iseman continues. “Real. Money.”

He adds special emphasis to those last two words, before regaling the story of Peter Jennings, a former Charles Schwab stockbroker, who won $1 million in a single fantasy baseball tournament on DraftKings.com, one of the most popular DFS sites. Since, he says, Jennings quit his job and became a professional daily fantasy player – with his own DraftKings sponsorship – on his way to grossing almost $20 million in winnings.

“Do you realize Peter Jennings has made more money playing fantasy sports than two-time Super Bowl quarterback Russell Wilson has made playing real sports?” he asks two weeks before Wilson changes that with his $31 million signing bonus with Seattle.

Yes, Wilson has more money now. But Jennings has never been hit by San Francisco 49ers inside linebacker NaVorro Bowman, either.

And Jennings isn’t alone. If Matthew Smith isn’t at a poker table in Las Vegas, he’s pouring over injury reports and making lineup changes. Granted, he told me he isn’t driving a Bentley or using $50 bills to light his cigars.

“Honestly, it hasn’t changed my life all that much,” he said. “It’s just made things a lot easier, and it makes it a lot less stressful when I’m on a bad run in poker or DFS. I still drive the same car, live in the same house, and I can’t think of any big purchases I’ve made other than a prepaid college plan for my two-year-old son.”

Eric Snead, who won $1 million in the 2014 FanDuel Fantasy Football Championship (FFFC), had never played fantasy football at all prior to last season. A mail carrier, Snead qualified for an all-expenses-paid trip to Las Vegas, where he was wined and dined for several days prior to watching his big day unfold live on a wall of flat-screen TVs at the Cosmopolitan casino.

Snead told me via telephone that he was blown away by all the attention he received both in Vegas and from the media after his windfall. But he said the greatest satisfaction he got from striking gold is one to which a great many people can relate.

“I don’t worry as much about bills, of course, and being able to take care of things and not live paycheck to paycheck. Being able to secure my family’s future—being able to see retirement as a real possibilityis a huge relief.”

“Just practical stuff,” Snead continued. “Knowing that there’s an endgame instead of just working endlessly and hoping you can make ends meet. It’s a great relief and satisfaction.”

John Lovelace, who brought home $500,000 in the 2014 FFFC, echoed a similarly sensible refrain, while reminding me that while Uncle Sam let DFS slide, he still wants his cut.

“No one likes to hear this part, but the IRS had a field day with my winnings,” Lovelace said, “quickly sweeping 40 percent right out from under me. I can’t complain about what I’ve been left with. Investing for college, my family’s future, and a couple charities I’ve been a yearly donator to just got a nice boost. My family’s future has been wonderfully secured, and I can’t ask for better than that!”

Mind you, Lovelace finished third. Snead came in second. The first-place finisher won the largest single prize ever awarded in fantasy sports.

The Mother Lode

That prize would be the $2 million won by Scott Hanson, who also had never participated in DFS prior to the 2014 season.

Hanson said it didn’t take him long to realize that daily fantasy sports could be much more than just a hobby.

“I had a big win very early on,” Hanson said. “I think it was only the fifth or sixth lineup I’d ever put together in DFS, but in Week 5 of last NFL season, I won $15,000 off a $5 entry on FanDuel, and it was my only entry in any contest that week. So I was basically playing with house money since my third week of DFS.”

Now, it is much more than a hobby—Hanson is one of a growing number of professional fantasy sports players.

“As of recently,” Hanson said, “it’s become what I do full time. Including watching games, I’m sure I’ll spend well over 50 hours per week now that it’s my primary source of income. During NBA season I was playing around $7,000 per week by the end of the season, although I took a while to work up to that amount. I’ll be bumping that up quite a bit for NFL this season.”

As to the experience of winning that kind of money off a $2 buy-in and experiencing the whole thing live to boot? Well, I’ll let Mr. Moneybags himself tell that tale.

“Well, I had made most of my lineup decisions throughout the week, but I was up until about 3:30 a.m. the day of the final [Dec. 14] trying to decide between using Jeremy Hill and Antonio Gates or Chris Ivory and Rob Gronkowski. I ended up deciding on the first combo based on Hill’s projected workload and matchup against the Browns with Johnny Manziel at QB (who I figured would turn the ball over a bit).

“I felt pretty settled and didn’t change the lineup after that. The decision paid off big-time, as I was the only player in the tournament to take Hill, and he ran for over 150 yards (actually, it was only 148) and two TDs. His strong start put me in first place early on, and I stayed there throughout most of the first wave of games.

“After a while, teams started passing me, and I eventually fell out of the top 10, but things were still looking good even then, because I had more players in the late games than those ahead of me, and my players were Demaryius Thomas, Gates and Connor Barth, whereas most players I was behind had guys like Delanie Walker, Chris Ivory or Chris Johnson. As the day went on, both Thomas and Gates scored TDs, and that put me in the lead for good.

“With about a half-hour left of game time, I knew I pretty much had it locked up. From there, I started to meet more of the other participants and just sort of waited for the games to end. It was crazy realizing that I was going to become a millionaire off fantasy football. I think the best part was being able to experience the whole thing with my wife. We were watching very closely all day, and it was just great to come out on top. She’d been saying for over a month leading up to the final that she thought I was going to win it all.”

It would appear that Hanson’s wife is a very smart woman. And that he’s a very lucky man.

Because make no mistake: Just as with season-long fantasy football or poker or any number of other games and contests, luck plays a huge factor in DFS.

Gold-Panning Tips

However, there’s no small measure of skill involved. And after being regaled with tales of victory and the spoils that come with it, you’re no doubt wondering how you can get yourself a nugget or two of your own.

I asked both winners for tips and pitfalls to avoid.

Smith advised that doing your homework is key. “Obviously, doing plenty of research is a good start. It’s possible to get lucky in a big tournament without knowing anything, but the odds are against you.”

He also said that while some DFS players wager hundreds (or even thousands) of dollars per week, a big investment isn’t necessary to make money.

“If you can’t afford to put thousands of dollars in action,” Smith said, “there’s still $3, $1 and even 25-cent tournaments with significant payouts, or you can grind up a bankroll by playing small 50-50s or heads-ups.”

Lest that sound like Greek, a “50-50” is a contest where the top half of all entrants win. Heads-up is just that—you against your opponent, mano a mano. The huge money, however, is in the tournaments, which can have thousands of entrants.

And in those tournaments, Smith said it’s vital to think outside the box.

“Find a way to be contrarian in some way on every lineup,” he said. “It’s nearly impossible to win a big tournament with all the “chalk” plays for that day/week. But if you can find a 1 percent-owned guy who is capable of having a monster game, then you could be at a big advantage if that player has a big game. The week I won, I had Arian Foster at 0.8 percent ownership when he went off for 30 points. While Demaryius Thomas scored more points, I think Foster was my most important player that day, just because his ownership was so low.”

And while everyone wants to hit the mother lode, Smith cautioned that patience is a virtue for the novice DFS player.

“Take it slow and don’t expect to win on day one,” Smith said. “There’s only so much you can learn before you start playing, so don’t go crazy buying into all the big buy-in tournaments. There are endless resources out there with plenty of free content and plenty of others that are subscription-based with more detailed info and/or recommendations. Look around and find a site or sites that you’re comfortable with and use those resources to put your own lineups together. Maybe, with some luck, you’ll be taking down the next giant DFS tournament.”

Hanson echoed many of Smith’s sentiments, from doing your homework to looking for players who aren’t in the lineups of everyone and their mother. But he also said it’s important not to let the superstitions inherent to fantasy football cloud your judgment.

“(Don’t) overvalue a small sample size in irrational ways,” Hanson said. “Particularly, assuming that a player doesn’t play well whenever you pick them…when you’ve picked them twice.”

It’s also important, Hanson said, to realize that what holds true on Tuesday may not on Thursday.

“Pay close attention to how players’ roles may change based on the news that comes out during the week. In both NFL and NBA,” Hanson said, “a sudden role increase that happens after the players’ costs are locked in is one of the best ways to get extra value out of your lineups. It’s true that others will pick up on this, too, so those players may be common picks, but as long as you mix in a couple of lower-owned players with upside, you’ll have a unique lineup that has a shot at winning a tournament.”

Snead, for his part, had a rather unique piece of advice—one that I’d wager not many DFS players consider, at least regularly.

“By the time people get around to the back end of their lineupthe tight end, the kicker and the defensepeople often take them for granted because they spent so much money on a top-end quarterback or running back. They neglect their kicker and defense.”

“But a lot of times,” Snead said, “that can push you over the edgemake your team different. Star quarterbacks can nullify one another (in a tournament), but if you get a defense cheap that can put up double figures, that’s a big deal.”

The name of the game in DFS is the same as in season-long fantasy football: value. Getting the most possible bang for your salary-cap buck. But in DFS, to hit it really big, you have to go one step further and find value in a combination no one else has thought of.

Hey, no one said it was going to be easy.

Well, you’ve heard the sales pitch, read the winners’ stories and hopefully filed away their suggestions.

Who knows? With some skill and just a little luck, maybe you can strike it rich, too.

And join the Fantasy Football Millionaire’s Club.

All quotes were obtained by the author unless otherwise noted.

Gary Davenport is an NFL analyst at Nerdy Football and a member of the Fantasy Sports Writers Association and the Pro Football Writers of America. You can follow Gary on Twitter at @IDPSharks.

Read more Fantasy Football news on NerdyFootball.com

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