Course No. M 301
Simply put, bankroll refers to the amount of money one has set aside strictly for daily fantasy purposes. For beginners, there's no optimal measurement to guide your starter fund. It all depends on how much you feel comfortable wagering.
When I first started daily fantasy, I deposited $20 into a DFS account. I played $1 and $2 Head-to-Head games, with my balance seesawing up and down for an extended period of time. It should be noted that I practiced with free games for several weeks before making my first deposit.
I was putting $1-$5 of action in play each night, and sometimes I felt like that was too much. After struggling to grind out a profit over some time, I finally reached an inflection point. I was beginning to win on a consistent basis and my balance started to marginally increase. Once I had a firm grasp on how to play, I deposited another $50 into my account. I felt more comfortable wagering a larger amount each night.
That was over three years ago, and I've since grown my bankroll into a position where I can make Daily Fantasy Sports a full-time gig. No, I didn't win any mega-super large tournaments. Instead, I've been grinding mid-stakes H2H, 50/50 leagues, and single entry tournaments while following the bankroll strategy outlined in this Daily Fantasy Café PhD course.
Lesson #1: In general, don't put more than 10-20% of your bankroll in play each night
Where you land on the 10-20% level is up to you, depending on how aggressive/conservative your approach is. Now, how you divvy that money up between head-to-head games and large tournaments is a matter of personal preference. Some people only play large tournaments, while others are more comfortable grinding the daily battle of head-to-heads and double-ups, mixing in a few tournaments along the way. More on that in the “Lineup Variance" section.
Lesson #2: Be cognizant of factors that can determine your nightly investable cash.
The following factors consist of:
Confidence. No, I don't mean how confident you are with your selections that night. Randomness could easily rear its ugly head and wipe away all of that self-assurance. Plus, if you feel good about a lineup, then odds are other people are feeling the same sense of security. On the contrary, I'm talking about confidence assembling lineups on a given DFS site. Are you comfortable with their pricing scheme? Can you easily pinpoint a mispriced (value) player? It may sound obvious, but your comfort level and DFS progression play a huge factor in bankroll methodology. As a rule, beginners, or someone trying out a site for the first time should not surpass the 10% threshold.
PRO TIP: Beginners should start out playing the $1 and $2 games first, instead of snagging the $25 - $50 games. It may seem cumbersome, but you have a better chance at yielding a profit by playing multiple low-stake games instead of one mid to high stake contest (skilled DFS players tend to sit in that range).
Game Slate. If there are fewer games taking place on a certain night (5 or less), it's best to scale back your bankroll volume. I'd notch it back to 10% at least; potentially even playing less if the landscape appears particularly risky.
Diversity. By playing multiple lineups (across cash games and tournaments), you inherently reduce some risk and allow yourself to put more cash in play. You'll see a further example of this in the “Lineup Variance" section.
Lesson #3: Basic Daily Fantasy bankroll strategy
A popular approach amongst the DFS community is the 70/30 rule, where 70% of your action is in cash games (h2h & 50/50) and the other 30% is in large tournaments. The viability of this strategy hangs predominantly in the ability of a player to consistently produce quality H2H and 50/50 lineups. It's for DFS enthusiasts who can expect to hit their cash games 55%+ of the time. Every now and then, a lineup will reach the top 10% for a substantial payout (in the tournaments). Otherwise, the profit from cash games should offset tournament losses, resulting still a modest profit for just a good (but not great) lineup. Here is an example:
Say you have $500 in your account, and you put 20% in play every night (following the 10-20% rule).
$500 * .20 = $100 total in wagers. 70% ($70) would go to 50/50's and 30% ($30) would go towards large tournaments.
This way, even if you strike-out in the big contests, you still will churn out a profit with an “above-average" lineup that cashes in all your 50/50 and head-to-head leagues.
PRO TIP: Of the $30 you have to spend on large tournaments, I would recommend breaking that up into multiple entries to give yourself better odds at hitting a big prize.
Having outlined the 70/30 approach, I should mention that this rule is a general guideline, and there are a lot of different routes you can take when budgeting your DFS bankroll. It all depends on how confident you feel in your skills for different contests, whether you have a better “feel" for the cash games or large tournaments. From here, you can move the 70/30 fraction accordingly (80/20 or 60/40).
PRO TIP: The nature of the sport also can change where you sit on the cash game/tournament fraction. For example, I tend to play a larger tournament % in MLB. This is because of the volatile nature amongst hitters on a daily basis. I have found that focusing heavier on multiple lineups in tournaments is a more profitable strategy: moving the scale to 60/40 or 55/45.
Maximizing Your Bankroll
On top of playing (and winning) there's a few more subtle methods to increase your available funds. Just as a savvy consumer would use coupons or go “sale shopping" to stretch their budget, the same can be applied to the daily fantasy arena.
Lesson #1: Take advantage of deposit bonuses
Almost every daily fantasy site offers some type of bonus for first time depositors. For this reason, I would advise an individual to potentially throw in a little extra cash when putting money on a site for the first time. Obviously, don't deposit an amount that will make you uncomfortable, but you want to maximize that first time bonus.
For instance, in the “Getting Started" section of this Bankroll Management course, I mentioned how my first deposit was $20. I really could've floated $50 at the time, and I probably should've gone that route (to earn a higher bonus). Even if $20 was all I wanted to deposit, then worst case scenario I would burn through my first $20 and reevaluate whether I wanted to play or not moving forward. If I kept playing, I would have the bonus at my disposal. If I quit (or took a break), I'd withdraw my remaining balance and no harm would be done.
Every now and then certain sites will offer “reload bonuses". I would strongly suggest taking advantage of these promotions if you are in a position to do so. A reload bonus is offered to all members (old or new), to make a redeposit and gain a percentage in bonus cash. Bigger sites like FanDuel and DraftKings don't typically do this, but mid-range and smaller sites like FantasyAces and DraftDay periodically have these offers.
Lesson #2: Hunt for “overlay"
In essence, “overlay" occurs when a guaranteed contest is not expected to fill, thus improving all participating users' odds at cashing for that one particular match.
For example, let's say DraftKings offers a massive double-up where the top 50% of the field earns a payout. They set the entry size at 1000 participants. It's getting close to game time, and you notice that only 700 people have entered. Quickly you join the contest at the last minute, and the contests ends up with 800 of the 1000 seats filled. Essentially, you have already beaten 200 opponents, thus greatly improving your odds at placing in this contest.
Finding overlay is getting more and more difficult due to the rapid growth of FanDuel and DraftKings, but it is very present on some of the smaller sites, especially on weekends and days when sports overlap (NBA or MLB on an NFL Sunday, etc).
Lesson #3: Know the enemy
It pays to be smart when selecting H2H opponents. Stay away from the sharks (high volume players), and instead take your chances vs somebody who has less of a track record. This is particularly easy on FanDuel, as you can click on a user's name to view their total wins by sport. Also, how many matches they have posted in the lobby usually indicates the seriousness of a user.
Try to peruse the lobby for lower-stake players with moderate-to-low win totals (for the given sport), and with few games listed. Eventually you'll become familiar with the regular “grinders" in the lobby. Whenever a username you don't recognize pops up, it's worth checking their status to gain a sense of how seasoned they may be. It won't result in a guaranteed win, but this method is an easy way to improve your H2H odds.