If you’re like me, you’re probably sick and tired of all the DraftKings and FanDuel commercials blasted on every major televised sporting event this fall.
Just who are these people? And how did they get the cash to run ad campaigns for every single college and pro league football, basketball, and baseball game?
Well, they fall into a brand new emerging market called “Daily Fantasy Sports” – or DFS for short.
But don’t underestimate them – this new industry is currently pulling in millions of dollars in venture capital.
Basically, players get to act as general managers in a smaller version of the traditional season-long fantasy sports league.
Entry fees can run just a few bucks. And if players pick the right team, they can win big – the top prize is $1 million every week.
But isn’t this gambling? How is this legally available online in most states?
That’s because it’s not classified as a game of chance, but a game of skill.
With the help of this legal loophole, the industry has attracted over half a billion dollars to date. And thanks to extremely high payout ratios, players have joined by the truckload.
For a market estimated at 51.8 million players for 2015, DraftKings is expected to dish out $1 billion. FanDuel, its competitor, is expected to pay $2 billion.
As one website put it, this is a climate ripe for insider trading.
The guys raking in the cash are the ones using analytics systems – much like I do in BioTech Intel Trader – to get a leg up on the competition.
Their algorithmic models are so precise, they can tell you if a player is projected to have a good week based on the length of grass on the field!
If you take a step back and look at what’s happening, we’re basically turning into a data driven world, where analytics are king for gaining insight and looking into the future.
This new industry, DFS, is just another example of how data scientists are mining hordes of statistics, and developing useful, profitable information to gain an edge.
It just goes to show: analytics can be used to beat most in this market, and the stock market.
I personally use the same approach to predict stock price movement using my own analytics engine, the social media collective intelligence system.
The way the stock market’s trading all over the place, I might just use it on this new DFS sensation.
Can anyone say: “lower risk, greater payout?”
Editor, Biotech Intel Trader