Payout Analysis – Part 1: Comparing Cash Game Structures
(Mar 21st, 2018)
This is part of a series of articles I will write on various payout structures of contests on Fanduel and Draftkings. While it is not the exciting, sexy topic that people love reading about, understanding payout structures and being deliberate about your contest selection over the long run will help maximize your profitability in DFS.
In this first article, I will lay the ground work concepts for my series by analyzing the cash staples offered on Fanduel for NBA. The same ideas apply to Draftkings in regards to viewing cash games as 2x, 3x, 5x profit multipliers. I will also talk about why I never play the Triple Double contest on Fanduel.
I. Defining Cash game contests
Cash games in DFS are typically any contests that have a flat pay structure (ie, you either win some set amount or not). I see cash game contests in two different classes:
• Double ups, Triple ups, Quintuple ups (Payout is full 2x, 3x, 5x)
• H2H, 50/50s, 3-player leagues, 5-player leagues (Payout is at 90% of previously mentioned levels, but at lower margin)
Margin (also known as rake) is a measure of what percentage of the prize pool is being paid out to Fanduel instead of to its DFS players. In general, we like lower margins in a contest since it means more of the entry fees go into the prize pool.
The follow paragraphs will dissect the various payouts and margins for each type of contest as well as some observations. For those of you that don’t like reading in-depth analysis, I will first make fun of you (“WHO ARE THE LOCKS?”), but then generously direct you to the bulleted summary in the takeaways section at the end (you’re welcome).
II. True 2x-3x-5x profit multipliers
It is not generally useful to ask “what score do I need to obtain in order to double up?” since scores fluctuate based on slates and whether or not the chalk hits. Instead, all of my tables in this entire series will be expressed in terms of the percentage cutoffs relative to the contest’s field size. There’s probably some conversion I could do now that Fanduel has released data that goes along with the Beat The Score contests, but I’ll save that for another article.
“DU%”indicates the cut off percentage for how you must finish in the contest to double your entry fee. For the $30K Big Double up (17241 entries), you must finish in the top 43.5% of the field, whereas, in the smaller $1K Double up (568 entries) you must finish in the top 44.01%. Thus, the $1K DU is a little more relaxed in its payout threshold and it is has lower margin.
Additionally, many coaches have pointed out that the $30K Big Double up allows 150 max entries, and thus you will find 150-entry trains from individual players. To run some numbers, if 10 players cash on a max-entry train, then this takes up 1500 payout spots (or 20% of the prize pool) and now only 6000 remaining spots will pay out. This essentially reshapes the payout structure such that the DU% threshold tightens up to about 35% of the field (and that’s assuming that the REST of the cashing entries are all single entry).
“3x%” indicates the cut off percentage for how you must finish in the contest to triple your entry fee. For the $300 Triple up (170 entries), you must finish in the top 29.4% of the field. Fanduel doesn’t offer a lot of triple up contests, but the table above shows the most common one. Do NOT play the “Triple Double” contest they offer (see my bullet IV for more). Draftkings is better IMO for trips as they have rotating $1 contests that open up throughout the day at similar margins and 3x% thresholds. Note: any DK tables in my articles will always have a Green header and FD tables will have a light blue header.
Similarly, I prefer DK for their quints since they are not only at a lower margin than FD but are also single entry. The problem with both Fanduel’s quint offerings is that they suffer severely if a max-entry train hits. For the Big Quintuple up, a max entry quint is 10% of the prize pool, and it’s even worse in the smaller quint (max-entry train eats up 15% of the prize pool). If you need a quint level of your cash game structure on Fanduel, then I recommend just entering 5-man leagues instead (see next bullet).
III. 10% margin class
These contests are different from the other class in the following 3 ways:
- Only 10% margin…
- …but 2x-3x-5x profit multipliers are reduced to 1.8x-2.7x-4.5x (ie, 90% of the other class)
- Playing against smallest possible pool (ie, higher variance among individual contests)
50/50s pay the same as H2H in terms of the numbers (margin and ROI) with the only difference is that you face a larger field. Because all contests from this class have small fields, you must enter into as many as possible, against unique players, if you want to try to smooth out the variance. Kevin (@ffootballgeek) has advocated this point a lot for H2Hs and that’s because it’s a property of statistics; score distributions will tend towards a normal distribution (ie, a bell curve) as you include more and more entries.
Thus, a single contest from this class might have higher (or lower) cash lines when compared to the 2x-3x-5x class, but if you enter enough of them, the cash lines will stabilize out to represent true 50%, 33%, and 20% thresholds for ALL lineups that night for the H2H, 3-player, and 5-player, respectively.
IV. Never play the Triple Double!
Have you been following the payout structures closely so far? If so, look at the table for Fanduel’s Triple Double and tell me why you shouldn’t ever play it.
OK, so do you see it? The 2x% threshold of this contest is tighter than the typical 44% for Double Ups AND the 3x% threshold of this contest is tighter than the typical 29% for Triple ups. In fact, a lineup that is good enough to place within the top 17.6% of a contest would actually be good for 5x in a Quint and yet it’s only 3x in this contest!
“But I like the upside built in – I want a format where I could possibly go from 2x to 3x profits!” Well, that’s why we ladder. Instead of playing five $2 triple double entries, play two $2 DU, two $2 TU, and one $2 quint. This ladder has the exact same maximum profit potential for a lineup that is in the top 17.6% (both cap out at $10 in and $30 out), but the ladder provides better protection if you score outside of the range. For example, if your lineup was in the top 40%, then Triple Double doesn’t pay you anything but the ladder would pay you $8.
- 10% margin class offers safer play but comes at the expense of lower payouts and requires more unique contests to smooth out variance
- Single entry double up format preferred over multi-entry since max-entry trains adversely affect the 2x% threshold (unless you are one of those trains). Largest field possible will reduce variance.
- Triple ups and Quintuple ups on Draftkings are generally better than Fanduel as they are single entry and re-offered continuously throughout the day.
- Triple ups are not prevalent on Fanduel and Quints suffer from multi-entry trains. Instead, 3-player and 5-player leagues on Fanduel offer similar play and payout.
- Never play the Triple Double format on Fanduel since the 2x and 3x percentage cut offs are so much worse than normal DU and TU thresholds.