Going For the Gusto Versus the Grind

There was an interesting graph posted today by a gambling industry analyst. It shows the reduction in play for larger tournaments in DFS.

The big GPP tourney's at FanDuel & DraftKings continue to shrink - I think mostly due to shift in player preferences pic.twitter.com/hWr8I0be5A

— Adam Krejcik (@akrejcik) December 7, 2015

Sure New York and Nevada are no longer taking customers from the start of the year, sure the big marketing push for week one was going to show declines, but like Adam notes, this looks significant. Players in DFS are moving away from harder to hit GPP's (lower hit rate, higher takeout bets) to head to heads and 50/50 play (higher hit rate, lower takeout, more of a grind betting).

This is pretty clear evidence of betting behavior  - winning is important and winning infrequently is not much fun. Moving to pools with a chance of winning more, with a longer term chance at profit, is perfectly rational behavior.

That market is becoming more and more mature.

Interestingly enough, in North America, the exact opposite has been occurring in racing. Harder to hit bets have grown in popularity. However, it's hard to discern anything too concrete from that, really, because the pricing mechanisms in North American racing are so bastardized (high win takeout, exotic takeout heavily rebated etc).

Overseas for horse racing, the grind is horse racing. Pricing via books for win betting only is where the action can lie with those scraping out some margins. New entrants to a space, like Palmerbet, see this in that mature market:

"Most of our clients have four or five accounts and are becoming very price sensitive," Grant says. "But we're a niche player, we're nimble and we're able to adapt to trends in the market ... which I think some of our competitors would struggle to do," Grant said.

To any new player sound advice is usually "bet win" and try and profit like that. Overseas with exchanges and 5%-8% overround's it's easier; over here, not that easy at all. Exotic betting is where most every day players find holes, but for the casual or new player (i.e horse bettors like those DFS players who are pivoting from GPP to every day play as in Adam's graph), it's a quick trip to the ATM and not very much fun at all.