What is skill?
As defined by Merriam-Webster:
skill
: the ability to do something that comes from training, experience, or practice
a : the ability to use one’s knowledge effectively and readily in execution or performance
b : dexterity or coordination especially in the execution of learned physical tasks
What is luck?
As defined by Merriam-Webster:
luck
: the things that happen to a person because of chance : the accidental way things happen without being planned
: good fortune : good luck
: success in doing or getting something
The problem with Daily Fantasy Sports is that it is not binary. That is to say, there’s never a time in any sport, in any given week, where we can say that someone’s lineup was 100% luck, or 100% skill. Ultimately, each individual will determine that proprietary mix by lineup lock in deciding how much time and effort they are willing to put into the research process. The only other factors that you can control are the types of games you choose, at times the opponents you choose, and the volume that you play (turning it up, turning it down). There are times when either skill or luck will dominate and are times it will appear as though neither does.
Take the NFL for example – if you picked the exact optimal lineup, that is, the lineup which is projected to score the most points given the player pool – you have done the best that you can. How did you arrive at your choices? Are you utilizing reliable data? Are you coming to conclusions as the result of a solid, winning process in the long run? If the answer is yes, congratulations! But, it doesn’t guarantee a winner, especially over the short term.
Even someone doing their homework in the example above still has to contend with luck. Take for example Week 10 in the NFL DFS competitions on Draftkings.
If you had identified the key players who were in good spots to put up a ton of fantasy points, you may have keyed in on the Pittsburgh Steelers and found an opportunity in their Running Back, D’Angelo Williams. Mr. Williams had an eye popping performance projection against one of the weakest rushing defenses in the league, the the Cleveland Browns. Other team dynamics also came into play, as Mr. Williams was backing up starting star running back L’Aveon Bell, who recently broke his leg and was out for the season, assuming a higher percentage of the overall workload. Also starting in this game was Mr. Landry, who was filling in for a freshly re-injured Ben Roethlisberger, who had been carted off the field during the previous game with an injury.
Big Ben was not expected to play at all, and did not start the game. In the first few minutes of the contest, however, Landry was knocked out, Ben came in, and proceeded to put on an aerial display as only he can – throwing for 300+ yards. The change in quarterback was totally unanticipated by the market. Everyone who had banked on D’Angelo Williams having a breakout game (40% ownership) was disappointed while those who had entered a Big Ben lineup on a lark, throwing a daily fantasy ‘hail mary’ with their lineup, flew up the scoreboards in every event they were entered into.
This is a clear case of luck (good and bad!), and risk vs. reward. It is also why anticipating player ownership is very important in DFS and should not be ‘leaked’ prior to lineup, as we talked about in previous blogs. Having a starting QB get knocked out of an NFL game to have the backup QB come into the game in relief is not exactly a ‘black swan’ type event. Having a starting QB on the bench who is injured, but healthy enough to suit up and play if needed isn’t either – but when these worlds collide, and the backup, who started in place of the number one guy gets hurt and the franchise quarterback ‘starter’ is required to go into the game, and stays in for the entirety of the game?Now, that’s rare.
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