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Comment by ddlatham | Hacker News Reader

From the article:

The data that DraftKings acknowledged was released by its employee, Ethan Haskell, showed what particular players were most used in all lineups submitted to the site’s Millionaire Maker contests. Usually, that data is not released until the lineups for all games are finalized. Getting it early, however, is of great advantage to make tactical decisions, especially when your opponents do not have the information at all.

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And to translate that to a potential game strategy, in large contests like these you generally want to zig when everyone else zags. Think of it like a lottery where you know what numbers everyone is playing beforehand. If 100 people bet 12345 and 0 bet 54321, you are better off choosing 54321. It won't necessarily get you a win, but it will help increase you expected value of return by knowing which popular numbers/players it is smart to avoid using.

Even with that, you'd still have to be good enough to pick the best roster. I don't think it's as useful as the article makes it sound.

Huh? You just use the company's internal pricing model and use it on other sites once you know discrepancies. It's not "simple" but it's not genius level derivatives trading, either.

What? I can see the prices of players on DraftKings and other sites as a player. That "internal pricing model" is public knowledge.

Those are the advertised pricing for players. If you do not believe that these companies have a private, internal model to set those "prices" to maximize their returns...

Their return is constant and only dependent on the number of players. They have no need for "secret prices"

No, but the parent comment is not that far off. Their prices are public but with the weight and velocity of betting coming in, it informs them what the lines probably should be instead.

You are correct. My comment is wrong.

The controversy isn't about knowing player price points. That's like the gameboard and it's known to everyone. It's about knowing ownership percentages - which is the overall percentage of lineups in a contest that drafted a certain player.

That info gets published once the contest starts (it's very compelling data), but having access to that ahead of time is the equivalent of insider trading - because you have knowledge other people don't have when they make their picks, which provides you a completely unfair advantage.

Yes, I realize that player owned percentages is a huge advantage (to bet against the field thus having a better chance of coming up). But not player pricing.

Oh.. right. I think we're saying the same thing then ;)

Except Draft Kings lets you enter 1,000 games per week so one can use portfolio theory with this information to increase the expected value of playing.

Not true. If anything, it's even more useful than the article makes it sound. If you knew absolutely nothing about sports, but had access to this data and a fairly basic understanding of probability and statistics, you could use this data to be basically +EV in any large field contest you enter. The lottery analogy by slg is a great metaphor to understand it.

This Deadspin article does a solid job explaining it: http://deadspin.com/draftkings-employee-with-access-to-insid...

Another very illuminating read: https://rotogrinders.com/threads/draftkings-ownership-leak-8...

so it's basically using the "wisdom of the crowds" that play on the DraftKings site to put together a really good pick? that still seems like it shouldn't count as equivalent to insider information, because it's aggregating a bunch of guesses that have no information either.

No. If 60% of people pick Player X, his value goes down. This is parimutuel betting. You don't want significant overlap if you can help it; how would you beat the crowd otherwise?

You find outliers and apply a pricing model that finds the best gaps. The information is incredibly valuable. Take it from someone who did this for a living at one point.

aha, looking up parimutuel betting made it a lot clearer. thanks!

No problem. It's intentionally hard to figure out. Parimutuel wagering is inherently extremely confusing on purpose.

This isn't quite parimutuel, because in that system all the bet totals are published in nearly-real-time. If you wait until 1 MTP to place your bet you have a very good idea what the odds will be. It isn't obvious to me why the sports gambling sites need to keep this information secret, other than to create exploitable situations like those described in TFA.

They don't need to keep the information secret. They could operate just like pool betting if they wanted to. The problem comes when the information is kept private but insiders can see it. This would be equally bad for pari-mutuel betting.

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