DFS Strategy: Using Multiple Sites & Multiple Lineups

There are currently four daily fantasy sites that we
recommend as being the best to use. There are the two large ones
just referred to, and also StarsDraft and DraftDay. You can read
our reviews of these sites on the following pages.

Signup Bonuses

One of the more compelling reasons to sign up at multiple
daily fantasy sports sites is to take advantage of the signup
bonuses that are available. Assuming you’re a winning player,
these signup bonuses are pure positive expectation.

• DraftKings offers a signup bonus of $600 when you
  deposit $600.
• FanDuel offers a signup bonus of $200 when you deposit
  $200.

Let’s say someone only has a $1,000 bankroll to commit to
fantasy football this year, and they put all of it into FanDuel.
They still only get a $200 bonus. They’ve left $600 lying on the
table.

Even if they sign up for just DraftKings, they’re leaving
$200 on the table.

But those aren’t the only two sites in the industry.
StarsDraft (formerly Victiv) offers a 100% bonus of up to $1,000
on your first deposit, too. DraftDay also offers a 100% signup
bonus of up to $200. By signing up for 4 sites, and if you have
a bankroll of $2,000, you can get $2,000 for free just by
signing up for all 4 instead of just one.

Even if none of the other reasons for signing up for multiple
sites apply, this one factor should be enough to encourage you
to sign up at multiple sites.

How much do you have to put into action before being able to
access your entire bonus? It depends on the site, but it’s
similar from one site to the other. One common methodology
involves releasing 4% of your total entry fees.

Here’s how that would work.

A player signs up at FanDuel and deposits $200. He gets a
$200 bonus. He puts his entire $200 into action the first week.
$8 of the bonus is unlocked.

Let’s say they’re really talented, and they win 58% of their
contests. (We’re assuming they’re playing in cash games.)
They’re up to $208.80 because of their winnings for the week,
but they also get to add that $8 bonus money, for a total of
$216.80.

Rinse and repeat every day until they’ve released their
entire bonus. If they play every day, and if they’re
consistently winning, it should probably take them less than a
month to earn their entire bonus.

Level of Competition

It’s hard to make a prediction about the level of
competition. But we do know one thing for sure.

Daily fantasy sports are a lot like poker. One of those
similarities is where the money comes from for the winning
players.

It comes from the losing players.

Your goal is to find the site with the weakest competition.

The only way to achieve that goal is to play at the various
sites and look at how your results stack up against the
competition.

If you sign up for four sites, you might find that one or two
of them have the weakest competition. Those are the two you’ll
focus on more once you’ve cashed in your signup bonuses.

But keep something else in mind, too. The level of
competition doesn’t just vary based on which site you’re playing
at. It also varies based on the buy-ins.

In other words, the competition in the lower stakes games at
FanDuel might be much weaker than the competition in the lower
stakes games at DraftKings.

But it’s possible that when you get into the higher buy-in
contests, the reverse is true—DraftKings might have tougher
competition. With experience, one might even be able to draw
some generalities. Maybe new sites have softer competition.
Maybe older, more established sites have tougher competition.

One thing is true, though. You can’t determine any of this
unless you play at multiple sites.

Overlay Situations

We’ve explained overlays on almost every page about daily
fantasy sports on this site. But we’re going to explain it again
here, because it’s that pertinent and important.

An overlay is a guaranteed prize pool contest where there are
too few players to justify the prize pool.

Here’s an example.

• FanDuel is offering a contest called the $350k Sunday
  Bomb.
• The entry fee is $25.
• They need 16,091 entrants to cover the $350,000 prize
  money and the commissions.
• As this is being written, they only have 418 entrants.
• If no one else entered the contest at this point, there
  would be a huge overlay.
• 418 contestants at $25 each is only $10,450.
• The site would make up the other $340k in an overlay.

In this particular contest, the top 3,135 players get paid,
so you’d be guaranteed a payout—even if you scored only 1 point
for the contest.

Of course, an overlay that large never happens, but it’s
illustrative of why an overlay is so powerful mathematically.

And indeed, that’s the trouble with overlays. They’re hard to
find. You want to enter as many overlay situations as possible
in order to maximize your expected return.

The only way to do that is to look for overlays at every site
you can.

Scoring Preferences

Finally, one other reason you might prefer to join multiple
daily fantasy sports sites is to take advantage of a scoring
system you prefer. Most of the sites have similar scoring
rubrics, but they all have differences. Some of these might be
more to your taste.

Some players hate scoring systems which have negative point
ratings for interceptions—or for anything else. They claim that
fantasy sports are less fun when you can lose points when a
player screws up. We disagree.

But we can see why this would cause such players to sign up
for additional sites. They might find the rules they like for
football at one site and baseball at another.

Why Use Multiple Lineups?

Why would you start a different lineup than your best
estimate of who will score the most points?

The answer is simple. You want to protect your bankroll and
reduce the effect of variance. Diversification is a good way to
do this.

Investors live by a concept called diversification. The idea
is to spread your investments around in such a way that you
don’t go broke if one of your investments goes sour.

Here’s an example.

• You buy stock in the MGM Grand in Las Vegas.
• It loses 90% of its value over the course of a year.
• If you’ve invested all your money in that stock, you’ve
  almost gone broke.
• If you’ve only invested 5% of your money in that stock,
  you’ve only lost 4.5%.
• The rest of your money is in other stocks, which
  presumably didn’t fare so poorly.

The same basic concept applies to daily fantasy sports.

A friend of ours once explained to us that on any given
Sunday, anything can happen. Suppose you have a great lineup,
and you’ve stacked the #1 quarterback with his #1 wide receiver.
In the first play of the game, your wide receiver gets injured
and has to sit out the entire game. Then in the 2nd play of the
game, the quarterback gets injured, too.

How many points are you going to score after that kind of
fluke?

It won’t matter that your lineup was the optimal lineup of
all. It only matters that you used that same lineup in a hundred
different head to head contests. You’re going to lose all of
them now.

Bummer, huh?

But let’s look at another example. Let’s say you come up with
an optimal lineup, but you also come up with 3 more lineups,
each of which is only slightly less ideal than your favorite.
You’re confident that each of those lineups will score well
above average.

So you put each lineup into 25% of your head to head contests
for the week. If one of your lineups does surprisingly bad, your
exposure to their loss is minimized.

You can even use multiple lineups on multiple sites, but it’s
not necessary. By just using 4 or 5 lineups, you’re protecting
yourself from risk of ruin.

You have, in effect, diversified your investment.

Avoid one thing, though. Don’t get so focused on diversifying
that your results suffer. Submit some lineups which are less
than optimal. Make sure they’re not TOO sub-optimal. Have a
floor beyond which you don’t play a lineup.