What Is Going To Happen To High-Stakes Fantasy Football?

King of Queens · Post by **King of Queens** » Fri Jun 10, 2011 7:19 am

Can't do a grand prize based on number of signups. Specific language in the 2006 law prohibits that.

I like your main idea, Wayne. The more transparency, the better.

Coltsfan · Post by **Coltsfan** » Fri Jun 10, 2011 7:27 am

Originally posted by King of Queens:
Can't do a grand prize based on number of signups. Specific language in the 2006 law prohibits that.

I like your main idea, Wayne. The more transparency, the better. I didn't know that. Why is that?

Wayne

Greg Ambrosius · Post by **Greg Ambrosius** » Fri Jun 10, 2011 7:35 am

Originally posted by Coltsfan:
I have been trying to think of a way to protect the players prize money without escrow and while I doubt many of the fantasy football operators would be excited about it, I could see it working.

1. Set aside ALL prize money for each and every league in a separate account from the operating account. Absolutely no co-mingling of the funds.

2. Have a running list of all leagues being operated by the contest with the total prize pool listed next to each league.

3. Give proof of bank funds to a (player board of directors) that shows that the amount in the account matches the total amount of prizes due from the leagues.

It's definitely inconvenient from the operators standpoint but it is a FREE way of providing at least a layer of protection for the players. The other thing it does is that it tells the game operators that there is a problem before it gets so far gone that they can't do anything about it. (Most business keep very poor books.)

The only other possible solution is a graduated grand prize based on the number of sign ups. Greg and Tom have said it won't work from a marketing standpoint but it hasn't really been done yet so I'm not so sure. I know I would feel better about playing in a contest set up this way verses the way it's being done now.

Wayne That's what I'm looking for Wayne. Good ideas and good start. I need to do the same thing for the FSTA and see if any of it sticks.

I'll address your final point first. The fantasy sports carveout language in the Anti-Internet Gambling Bill spells out how you can legally run a pay-to-play fantasy game and you can't do a sliding scale. You have to guarantee the grand prize based on the number of teams you believe you'll get and go from there. You can't go down unless you're willing to cancel the contest completely and start with signups again. In that case, you could ask your current signups if they want a full refund or would agree to the new prize structure.

Not to get too deep, but obviously the WCOFF sold out every year from 2003 to 2007 and their prizes were based on those sold out numbers. Lenny and Emil made a profit every year after 2002 and it wasn't hard for the average person to figure that out using revenue totals minus prizes and likely expenses. Unfortunately, when the decision was made at the WCOFF to base prizes on 1,200 Main Event teams the added overall prize pool made the Main Event less profitable. There was still more revenue than prize money from that event, but with expenses also rising and the prize structure too high it made for an unsustainable future. The WCOFF would have been wise to have gone back down to the prize structure from 2006 or 2007 with a $200,000 grand prize and returned the event to profitability, but nobody there was able to make that critical call. Then when you add in the losses from baseball, you can see where we are today.

I think transparency is the key and the players have to take some stake in this, too. You have to admit, the players saw the total prize pool over there the last three years and they saw the crazy baseball numbers and yet they still took the $500 discounts, the buy one get the second one at half price sale, the rollover baseball spots and nobody really ever asked any tough questions. Like contests before it found out, at some point the business model doesn't work. The margins are just too small in this space for discounted entries and exhorbitant add-on expenses. It's just not a winning formula.

I listed what the contests are projected to bring in via revenue and what net profit they'd make after prize money is awarded but before expenses. Obviously if we all hit our goals you can see which contests should have enough prize money set aside. I think every year of the NFBC and NFFC you can see whether we're making a profit or not because we're the only contest that lists every player in every contest. I could give you the total revenue minus prizes after each event if that helps, but I'm not far from doing it right now. So I think we're being transparent and the day we start missing our stated goals by 25% (teams) or start giving out $500 discounts I hope you ask questions.

I'm all for asking every contest to do what you say in No. 2 and if the FSTA's contest committee wants to see revenue minus expenses figures we'll gladly show anyone that. But as we all know, added expenses can still lead to problems and that might be part of the problem here. There certainly was more revenue than prize money from the live football event each year, but some expenses likely turned the final number into the red.

Transparency, transparency, transparency. That's for the game operators.

And for the consumers, this bit of advice: If it looks too good to be true, it probably is.

Team Legacy · Post by **Team Legacy** » Fri Jun 10, 2011 7:39 am

Originally posted by Greg Ambrosius:
So I think we're being transparent and the day we start missing our stated goals by 25% (teams) or start giving out $500 discounts I hope you ask questions. Didn't you just give a $420 discount if somebody new signs up for the 2-pack? Time to open your books Greg!

King of Queens · Post by **King of Queens** » Fri Jun 10, 2011 7:42 am

Originally posted by Coltsfan:
quote:Originally posted by King of Queens:
Can't do a grand prize based on number of signups. Specific language in the 2006 law prohibits that.

I like your main idea, Wayne. The more transparency, the better. I didn't know that. Why is that?

Wayne [/QUOTE]The law is written so that the consumer always knows their odds of winning.

Coltsfan · Post by **Coltsfan** » Fri Jun 10, 2011 7:45 am

Originally posted by King of Queens:
quote:Originally posted by Coltsfan:
quote:Originally posted by King of Queens:
Can't do a grand prize based on number of signups. Specific language in the 2006 law prohibits that.

I like your main idea, Wayne. The more transparency, the better. I didn't know that. Why is that?

Wayne [/QUOTE]The law is written so that the consumer always knows their odds of winning. [/QUOTE]That makes sense. For whatever reason that wasn't registering with me. Thanks,

Wayne

DoubleG · Post by **DoubleG** » Fri Jun 10, 2011 9:13 am

So what happens now...wait and then wait some more???

If you are owed money and haven't contacted an attorney yet, now might be a good time to do so. At least to get your LEGAL options spelled out and clarified. I believe high stakes player Jack Haan is very knowledgeable in this arena.

[ June 10, 2011, 03:13 PM: Message edited by: DoubleG ]

Greg Ambrosius · Post by **Greg Ambrosius** » Fri Jun 10, 2011 9:20 am

Originally posted by FPA - Scott Atkins:
quote:Originally posted by Greg Ambrosius:
So I think we're being transparent and the day we start missing our stated goals by 25% (teams) or start giving out $500 discounts I hope you ask questions. Didn't you just give a $420 discount if somebody new signs up for the 2-pack? Time to open your books Greg! [/QUOTE]If it keeps some of these folks in the live events space, it's money well spent. Never throw good money at bad situations. This is good money on good people. It will more than pay off for us and them, especially if we exceed our modest Main Event goals for 2011.

Quahogs · Post by **Quahogs** » Fri Jun 10, 2011 4:59 pm

Col. AFFL Junglecoff
Gottarunwithyourdough 2day Cuba

"We use words like delay, dodge and spin ...we use these words as the backbone to a life spent destroying HSFF. You use 'em as a punchline. I have neither the time nor the inclination to explain myself to a man who rises and sleeps under the blanket of deceipt I provide, then questions the manner in which I provide it! I'd rather you just said thank you and went on your way. Either way, I don't give a damn what you think you're entitled to!"

Greg Ambrosius · Post by **Greg Ambrosius** » Sat Jun 11, 2011 2:16 am

Originally posted by Quahogs:

Col. AFFL Junglecoff
Gottarunwithyourdough 2day Cuba

"We use words like delay, dodge and spin ...we use these words as the backbone to a life spent destroying HSFF. You use 'em as a punchline. I have neither the time nor the inclination to explain myself to a man who rises and sleeps under the blanket of deceipt I provide, then questions the manner in which I provide it! I'd rather you just said thank you and went on your way. Either way, I don't give a damn what you think you're entitled to!" Steve, let's find the line where Jack screams "YOU CAN'T HANDLE THE TRUTH!" Maybe that's what the WCOFF is thinking. They are sparing everyone from the truth. But I really think the truth is what everyone wants and then again once the truth and past payments are out there everyone can decide where they want to play in 2011. Truth and cash owed is what is needed here.