FanDuel’s Bitcoin Bowl Draws Jeers, Cheers
To begin this article, I am going to increase the viewership of this website 20-fold: Bitcoin.
There. I did it. I used the word Bitcoin. Let’s watch the Google hits pile up. As you likely know Bitcoin and other cyber-currencies like Litecoin and Etherium are all the rage right now as speculators have driven their prices up, up, up for the better part of a year. With its decentralized system away from the regulations of banks and the federal government, many online poker rooms now accept Bitcoin and some Bitcoin-only poker rooms have even been created.
And now one of the most popular daily fantasy sports (DFS) sites has jumped on the Bitcoin train. This past weekend, FanDuel hosted two contests in which the prizes were Bitcoin: the $3 buy-in Bitcoin Bowl Tournament and the Bitcoin Bowl Free Play. The latter was, as the name says, free to enter, and awarded a single Bitcoin to the overall winner. Both contests encompassed the four Wildcard Round NFL games, two each on Saturday and Sunday.
It was the $3 Bitcoin Bowl, though, that drew the ire of many in the DFS community. That tournament, for what is obviously a very low price, awarded prizes to the top four finishers: 2 Bitcoins for first place, .5 Bitcoins for second place, and .25 Bitcoins each for third and fourth place. Simple, easy to understand, and a chance for people to win Bitcoin.
Bitcoin’s value fluctuates by the second, but looking at a historical price chart, the price of one Bitcoin was about $16,000 when the NFL games ended, so we’ll use that as the mark. This means that the total value of the prizes in the Bitcoin Bowl was $48,000. With $32,000 to the winner and a few thousand to each of the next three players, that’s pretty good for three bucks!
The problem, though, was that FanDuel did not put a cap on the number of entrants in the Bitcoin Bowl contest. As a result, more than 42,000 players entered, paying a total of $126,000 in entry fees (we’re just using a flat 42,000 entries for our calculations to make the numbers look pretty). With $48,000 in prizes, that means FanDuel raked $78,000 from the Bitcoin Bowl.
Voices from around the DFS community condemned the contest as a huge rake grab. Because of the low buy-in and the use of the white-hot Bitcoin as the prize, the contest was seen as a clever, if not predatory, way for FanDuel to attract players who were completely oblivious to the rake. The players just saw BITCOIN and THREE DOLLARS and said, “SIGN ME UP!”
Said one upset player on Rotogrinders:
It is the biggest #RAKEGRAB in the history of modern America.
Shame on FD for FLEECING their customers and taking advantage of the cryptocurrency hype.
This is the type of stuff that takes companies OUT OF BUSINESS.
Now, that is admittedly a bit overboard, but it does reflect the (exaggerated) feeling of many. Some players were also offended by the marketing of the tournament as being a great “value,” when it really wasn’t.
There were many other people, though, that had no problem with the Bitcoin Bowl, even with a small prize pool compared to the total buy-ins. Plenty of players saw it has a fun chance – albeit a miniscule one – to get in on the excitement of Bitcoin when they might otherwise never do so. In a way, it’s basically like having a Ferrari as the top prize, even if FanDuel took a gigantic rake. Most of us will never get a chance to own a Ferrari, so why not give it a shot?*
Plus, who knows, the price of Bitcoin could continue to go up in the long-term, so that $32,000 first prize and $48,000 total prize pool could grow much bigger as time goes on.
For those who hated the idea of the Bitcoin Bowl and are afraid that FanDuel or other daily fantasy sports sites will start loading up their slates with heavy rake contests that award a few units of cyber-currency, don’t be. Until the time comes that DFS sites readily accept Bitcoin, contests like this are essentially giving away money that will be removed from the site and not injected back into contests. Winners will have no choice but to cash out the Bitcoin, unlike cash winnings that typically get plowed back into more tournaments.
*I understand it’s not a perfect comparison, as anyone can buy a fraction of a Bitcoin for a manageable amount of money while you can’t buy a fraction of a Ferrari, but just work with me on this.