Big $$ experts league

[rodyk]

Your impression notwithstanding, I was only wondering if it could be done cheaper.

Some people don't need the glitz and glamor (belagio, etc), just give 'em a back room of a sports bar with a couple of wide screens, beer, and pizza. NFBC is becoming a "high roller" venue.

[D Wrek]

Some people don't need the glitz and glamor (belagio, etc), just give 'em a back room of a sports bar with a couple of wide screens, beer, and pizza. NFBC is becoming a "high roller" venue.

Interesting point. Every venue is so different. Vegas being very expensive. And St. Louis being pretty like you explained and thus a lot more cheap. So they may not make much of a profit in Vegas, but make up for it in St. Louis.

It is a business afterall, they need to make aprofit for services offered.

[PD@HQ]

It is a business afterall, they need to make aprofit for services offered.

Indeed. But I'm just curious why some other entrepreneur hasn't stepped in with a value prop that returns even more of the loot to the players. In casinos, for a long time they undercut each other on the rake,whether by turning up the payouts on the slots or allowing double or triple behind-the-line plays at craps.

Come to that, what's the highest money private league anyone has heard of? We know about joshturin's league -- anyone know of any others?

I've always thought I'd like to start a league with a $10K one-time buy-in, invest the fees in income stocks and run the league and the prizes on the investment proceeds. You could have $6K in prizes every year with a 5% dividend return!

[rodyk]

Indeed. But I'm just curious why some other entrepreneur hasn't stepped in with a value prop that returns even more of the loot to the players. In casinos, for a long time they undercut each other on the rake,whether by turning up the payouts on the slots or allowing double or triple behind-the-line plays at craps.

Come to that, what's the highest money private league anyone has heard of? We know about joshturin's league -- anyone know of any others?

I've always thought I'd like to start a league with a $10K one-time buy-in, invest the fees in income stocks and run the league and the prizes on the investment proceeds. You could have $6K in prizes every year with a 5% dividend return!

Count me in! You would have no problem filling the league. Maybe for a little less entry fee tho!

[Gillibuster]

Good thing you didn't start that league in 2008.....

[bluenose]

NFBC/ROI

Here's my two cents. You might think I'm arguing with myself, but if you follow along carefully, you'll see I'm not:

1) The rake is too high and yes I'd love a league I could play over the 'Net where the rake was lower. I don't want to fly to Vegas; for me, that expense is rake by another name. If anybody's running low-rake leagues over the net with a protected prize pool, get in touch.

2)The claim that "everyone entering NFBC has a negative expectancy" is not proven, and is very likely false. There is a ton of dead money in their events.

I'll leave you with a true story that a friend of mine, a pro poker player, told me. He and his fellow pros were making the rounds of LA's legal poker rooms. The table fees were the same at each. For one reason or another, they gravitated to Hollywood Park more often than anywhere else.

One day, Hollywood Park unilaterally raised its table fees and nobody followed. Most of the sharps took off like bats out of hell, "never to darken Hollywood Park's doors again!" My friend stayed. One day, at a tournament in Vegas, two of his friends started ridiculing him for staying at Hollywood Park and paying the highest table fees in California. My friend took the criticism in silence. One guy finally said "Anybody who plays at Hollywood Park is very likely to be a sucker, in fact, I bet 98% of the people who play there are su-"...and the light came on, and the pros started playing at Hollywood Park occasionally again.

Am I better off playing in a low-rake league I found in these forums with 14 sharps, or an NFBC league with 7 sharps and 7 suckers? I'm not convinced that the low-rake league is always the answer.

[PD@HQ]

Great post, bluenose! I laughed out loud at the story about your pal.

I don't mean to speak for others, but I think the assertion that "everyone entering NFBC has a negative expectancy" is not meant to describe their personal expectations of winning or doing well; it is meant to describe their mathematical situation -- and it does. Any gambling enterprise that pays off short of true odds confers on its players a negative expectancy.

As for the likelihood of suckers gravitating here or there in big-stakes Roto, I couldn't say. I just wonder why we haven't seen a lower-rake alternative arise.

[PD@HQ]

Good thing you didn't start that league in 2008.....

It wouldn't have mattered, as the investment design would have been for income rather than capital gains. The stocks in the league portfolio would not be bought and sold to create the prize pool and pay fees. The dividends from the issues would be the source. There were quite a few dividend reductions over the time of the "crisis" but I was thinking mostly preferreds.

[Michael@HQ]

I don't mean to speak for others, but I think the assertion that "everyone entering NFBC has a negative expectancy" is not meant to describe their personal expectations of winning or doing well; it is meant to describe their mathematical situation -- and it does. Any gambling enterprise that pays off short of true odds confers on its players a negative expectancy.

This doesn't seem to be what the original poster intended, given that his league pays out 95% of the prize money. He seemed to mean a negative expectation in the mathematical sense, adjusted for the skill level of the participants but indeed offered no proof that the NFBC fell on the wrong side of that dividing line.

Another advantage of the NFBC over a large stakes private league is that there is a business with an industry wide multi-year reputation standing behind it. We've seen plenty of posts over the years detailing about how private leagues can implode, which might become a bigger deal if it's a high stakes league.

[bluenose]

I don't mean to speak for others, but I think the assertion that "everyone entering NFBC has a negative expectancy" is not meant to describe their personal expectations of winning or doing well; it is meant to describe their mathematical situation -- and it does. Any gambling enterprise that pays off short of true odds confers on its players a negative expectancy.

That definition only holds if the contest is random. If we really thought fantasy baseball is random, we wouldn't be on these boards.

Suppose you, me, and Usain Bolt are going to run 100 metres. We each put in $10. The organizer's going to pocket $5, and the winner's going to get $25. My expectation in this contest is negative. Mr. Bolt's? Not so much.

[PD@HQ]

Suppose you, me, and Usain Bolt are going to run 100 metres. We each put in $10. The organizer's going to pocket $5, and the winner's going to get $25. My expectation in this contest is negative. Mr. Bolt's? Not so much.

The analogy isn't apt. Fantasy baseball is a game with a HUGE luck component (and therefore randomness) than a 100-metre dash, which is essentially all skill. We all like to think that the outcome in our fantasy league's is based mostly on our skill as drafters and managers, but we also all know it's not really true. If it were, we'd all win every year!

It's more like poker. There's a lot of risk management, money management, and table awareness, but three of a kind still beats two pair. And if you, me, and Phil Ivey get into a poker game, in a short run I like my chances all right (certainly more than my chances outrunning Usain Bolt) because I know I might catch some cards. Nonetheless, over the long run I have a negative expectancy because the rake guarantees that I (and all my fellow players) will receive payoffs that are short of true odds. And the shortness varies with the rake.

Someone noted that the NFBC probably gets some play because players are confident the league won't implode and take the money down with it. (Reminds me of Charlie Munger's quiz to a B-school crowd a few years ago, when he asked them under what circs it's rational to pay a higher price, and after a while one kind finally noted that it might be good to pay more if the item was critical, because price acted as a proxy for quality.) It's a valid point, but I wasn't thinking about an individual setting up a high-stakes league; I was wondering why Bally's or Harrah' doesn't try it. They have a much lower need to have the fees cover overhead, and heaven knows players wouldn't worry about losing the entire pot because the owner wanted to buy a new car or take Paris Hilton out for a night on the town.

Even at that, a private large-stakes league could install fairly simple controls (12 signatures for all withdrawals, for instance) to prevent looting the fund. There are thousands of "stock clubs" in Canada and the US where just such controls are in place and work very well to protect the money.

[Todd Zola]

FWIW, two high stakes football contests have gone out of business the past couple of years, leaving their prize-winners high and dry.

I think (well, truth be told, I know) there is more to it than meets the eye.

This year there is a challenger to the NFBC.

Plus there have been quite a few private leagues formed from friendships stemming from the NFBC.

What I have always wondered is why do some enter the main event of the NFBC with the hope of "just winning my league?" If you want the comfort of playing in the NFBC, and there is MOST DEFINITELY a comfort level involved with respect to the way it is run, why not take the entry fee for the main even and enter satellites instead, where there is nothing taken out for the overall payouts so if you indeed win your league, you get a much steeper return on your investment.

[PD@HQ]

Who was running the football ones that failed?

[Todd Zola]

Who was running the football ones that failed?

Honestly don't know because I don't play but they talk about it at the NFFC forums, the football version of the NFBC which I have played in the past.

[bluenose]

"Fantasy Jungle" was slow-paying; not sure if that got squared away or busted out. AFFL no-paid, changed ownership, and the new owners were making overtures about squaring things, but I don't know how that turned out either. I never played with either outfit. I thought I was being slow-paid at Ant Sports one year and didn't go back, but in retrospect there might not have been anything to be worried about: customer service is lousy to non-existent but I've never heard of a no-pay there.

Re: the Bolt comparison: I admit I'm stretching here, and yes the luck component in running 100 m is a lot less, but some of the NFBC entrants really do have zero chance. It's a long way from the typical local league or Yahoo league to NFBC. I was in an NFBC sat last year who left the draft room after round 8 because, "after the first eight rounds, everybody's the same anyway".

Re: the notion of private leagues with strict, simple fund controls: if you ever get that going, please, get in touch. I'd do it myself but I don't know how and wouldn't want to ask a dozen people to join me on the learning curve.

To Zola's point about people saying they just want to win their league: I think you're spot on, sir, but I think deep down these people aren't being honest with themselves: Deep down they want the lottery ticket of winning the $100K.