Football season didn’t get off to quite the start daily fantasy sports site operators were hoping for, but there may not be significant cause for concern—at least not yet.
Monday night’s Virginia Tech/Ohio State game notwithstanding, the first weekend of college football is in the books and sites endured massive overlays across the board in their Week 1 contests.
Some of that is by design. Operators often choose to set huge fields that won’t likely fill early in the season. The reasoning: the large prize pools will attract players. If the contests fill, the sites have new customers and reap more revenue. If they don’t, players have a better chance to win, and those winnings will more often than not remain bankrolled, creating customer retention.
But how much is too much? Year-over-year comparison figures were not immediately available, but according to figures supplied by SuperLobby.com, FanDuel was hit with somewhere in the neighborhood of $160,000 in overlay for its Saturday contests. DraftKings’ numbers were not available, but some contests were noted to be less than two-thirds filled when lineups locked.
Several industry observers also noted that this year’s overlay numbers appeared substantially larger than in the past.
Honestly has to be the most overlay I have ever seen in DFS. And it’s everywhere.
— Dan Back (@dan_back) September 5, 2015
It was fortunate from an ROI perspective but today we saw that CFB is not a mainstream DFS game. DK and FD both got hit with lots of overlay
— Grant Gurtin (@GrantGurtin) September 6, 2015
And despite the massive marketing push from both big sites, it’s been the same industry guys playing CFB in all the games I play in — Grant Gurtin (@GrantGurtin) September 6, 2015
Let’s hope DraftKings & FanDuel see better demand for NFL next wknd, b/c CFB is off to a rough start & it’s not for a lack of advertising — Adam Krejcik (@akrejcik) September 5, 2015
Representatives from FanDuel and DraftKings were not immediately available for comment Monday, but it’s clear much is riding on the coming football season.
Both industry leaders have ramped up ad spending with fresh campaigns saturating television, radio and web channels. DraftKings has been especially aggressive. According to the most recent estimates, DraftKings has spent $21.6 million, airing 6,450 ads on television in the last seven days. Only AT&T has spent more, and no company has aired more ads.
Much of the marketing surge is geared toward the NFL season. Professional football is daily fantasy’s most popular sport, and operators are hoping for a repeat of last year’s boom during the final months of the year.
It’s unclear as of now if the slow start for college football is an indicator that growth may not reach bullish projections, or simply that the amateur game remains a niche sport in DFS.
As of Monday afternoon, the largest NFL contests on DraftKings and FanDuel were between 25-27 percent filled. Though similar tournaments don’t often fill until hours before deadline, it’s a situation that bears monitoring over the coming weeks.
Should be exciting 3-mo’s ahead (lot of +s right now), but if by NFL wk3 still seeing any meaningful overlay, I’d be little concerned.
— Adam Krejcik (@akrejcik) August 28, 2015