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Flights of Fancy: The Multibillion-Dollar World of Fantasy Sports

By Quinten Plummer
Sep 30, 2015 8:00 AM PT

Americans are expected to spend US$4.6 billion on fantasy sports this year, while vying for a payout of around $107 -- the average prize for winning the biggest fantasy league games, according to American Express.

Driving that spending and risk taking are a passion for sports, the promise of purses, the push of new platforms, and the pull of camaraderie.

By the Numbers

Blooming from backrooms and bars into a system available anywhere a smartphone has bars, is fantasy football. About 74.7 million Americans plan to participate in a fantasy football league this year, said American Express spokesperson Jane Di Leo.

"Fantasy sports -- fantasy football, in particular -- are becoming an increasingly popular activity among Americans," she told the E-Commerce Times.

Of the people who indicated they intended to join a fantasy sports league, about 48 percent said they would join a single group, according to the American Express Spending & Saving Tracker. About 27 percent planned to join two leagues, about 8 percent intended to juggle three, and about 6 percent expected to participate in four or more.

Just as more women have been embracing football, there's been an uptick in females engaging in the fantasy side of the game. About one in five fantasy contestants were women, the tracker found.

The top places to play online include ESPN, with about a 54 percent market share; Yahoo! Sports with about a 40 percent share; and CBS Sports with around a 29 percent stake. While the rise of such sites has made it possible to set up a league and draft players from anywhere that has Internet access, about 40 percent of fantasy leagues still draft at a friend's home, and about 8 percent hold the proceedings at a bar or restaurant.

The League, Before the Show

fantasy sports league trophy

Unlike the fictional fans in the television sitcom The League, who are relative newbies to the fantasy games, Mike Nemecek and his pals have been battling to predict the box score rock stars for more than three and a half decades -- all for a trophy whose stature and stateliness is reminiscent of Stanley's massive cup.

A 35-year veteran of fantasy games and manager of his team, Nemecek is also a public relations manager for SAS, a software company that offers sports analytics, among other tools.

Nemecek's league has seen the rise of the Wildcat and West Coast offenses, and the members joke that they still use leather helmets with no face guards.

"When we started playing, there was no World Wide Web," Nemecek told the E-Commerce Times. "Weekly results were snail-mailed, and the Monday morning newspaper and its box scores were hugely significant. There were no fantasy magazines, let alone websites and TV shows."

Though the times have changed, the premise, at its core, remains untouched. Draft a team composed of any player from a sports league, handpick starters from that roster, and hope that week's starting players record better stats than rivals.

It isn't the formula that glues leagues together. It's the people who love it -- the ones who've known each other for years or decades, and the ones who can take and give playful jabs others might not understand.

Today, online platforms host fantasy draft lobbies, convert stats into points in real time, and give league managers intricate consoles for governing. Despite the ease online draft boards afford, Nemecek's league still drafts in person, he said, and travel is the group's biggest expense.

"Our draft, hosted by the previous season's champion, is an annual highlight," he said. It's "described by my brother, Phil Nemecek -- the league's founder and self-appointed commissioner-for-life -- as a 'combination of Christmas, Thanksgiving and my birthday -- a day I look forward to all year.'"

Though Nemecek's league has evolved to utilitize Web tools, its members still use the classic weekly matchups formula, in which teams try to score more than their scheduled opponent each week. These days, however, the variety of games has evolved to target both hardcore gamblers and casual consumers wary of ponying up for games of pure chance.

Jeopardy: The Daily Disbursement

Today, and each day really, there are online platforms that offer fresh sets of fantasy sports challenges every 24 hours, distilling the weekly model into hard shots for avid gamblers. Daily fantasy sports platforms have surged over the last two years, as America's appetite for fantasy sports requires more meal options.

DraftKings and Fanduel mobile apps
DraftKings and FanDuel Mobile Apps

As DFS platforms gained more attention from the media, as well as and investors and lawmakers, questions about the sustainability of the format have arisen, according to Derrick Morton, CEO of FlowPlay and a 20-year veteran of the casual games industry.

DraftKings, FanDuel and the like have focused heavily on customer acquisition and have targeted hardcore gamblers, but that business model leaves little room for growth, he told the E-Commerce Times.

"While DFS has tried to expand their appeal by focusing on sports beyond football and even introducing betting on eSports, they still fail to successfully reach nongamblers or have a mass-market appeal," Morton said. "Despite their lack of broad appeal, I do believe that DFS has established a stronghold that will keep users engaged for the next two to three years."

DFS' legacy may be the accommodating atmosphere such leagues have created in the U.S., making the country much more favorable to fantasy sports in general, he suggested. In the states, sports are already akin to a religion, and football is the dominant denomination.

Fantasy's Foundation, America's Fixation

About 60 percent of males aged 25 to 54 gamble weekly on sports in some form, according to oddsman Scott Cooley, a consultant for BookMaker Sportsbook.

During football season, that percent rises by about 20 points, he said.

"Fantasy football will always be the alpha male," Cooley told the E-Commerce Times. "Football has supplanted all other sports as America's pastime, and that fact won't change any time soon."

On a much wider arc than DFS, the trajectory of the weekly variety of fantasy football is akin to a Favre-like floater -- but it'll eventually reach its apogee, according to Cooley.

"We saw the poker boon come to a head almost a decade ago, and while it is still more popular than it was 30 years ago, that sector of the gaming industry has certainly seen a decline," he said.

As for its trajectory, the folks at Latitude 360, which maintains the 360 Fantasy Live platform, don't foresee a drop in fantasy sports anytime in the near future, according to the Brent Brown, CEO and founder of the site.

They also don't see any other game yanking football's fantasy crown and ending its reign, he told the E-Commerce Times.

"Football is the 800-pound gorilla in the fantasy sports world, so it looks like it will be a while until another fantasy sport takes over," Brown said. " Other fantasy sports could rival football as long as they know how to be consistent in a year-round usage."

Quinten Plummer is a longtime technology reporter and an avid PC gamer who explored local news for a few years, covering law enforcement and government beats, before returning to writing about things run by ones and zeros and the people who make them. If it pushes pixels or improves lives, he wants to learn all he can about it.

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