Maximum Fantasy Sports is Setting the Trends in the Industry

Written by:
Thomas Somach
Published on:
Dec/15/2014
Maximum Fantasy Sports is Setting the Trends in the Industry

Site originates game varieties that others then copy

CHICAGO -- One of the up-and-coming new fantasy sports websites that is attracting a lot of attention these days is called Maximum Fantasy Sports and is run from the Windy City in the Heartland of America.

That alone makes it stand out--most fantasy sites, it seems, are based on the East or West Coasts.

But the main reason it's starting to stand out among its peers is the variety of fantasy play available.

There are lots of options that just aren't options at competing sites.

Such as?

Glad you asked.

Gambling 911 paid a visit earlier this week to the Maximum Fantasy Sports company headquarters and caught up with company co-founder Bill Parsons for a lengthy interview about his company, where it's going and why it's different, among other things.

Here is a transcript of that interview:

Gambling 911: How does your fantasy operation work and how is it different from the many other fantasy leagues out there? What states and countries are you legal in and how do you stop players who are not in those locations from joining? And what is the age limit to join and how do you verify that?

Bill Parsons: We provide one stop-shopping for fantasy football players by offering redraft and keeper fantasy football leagues in a head-to-head and total points format for private and public leagues. We offer these leagues in daily, weekly, monthly, in-season and full-season durations. The public leagues can be free or for a variety of different buy-ins and payouts. Additionally, we offer survivor pools, confidence pools, pick ‘em pools and squares pools to round out the offerings. Each pool has its own set of unique offerings. Each can be reviewed online here For fantasy leagues, we have numerous advanced features that other sites don’t offer, such as In-game player changes to allow for changing players out quarterly or by half. This is great for handling injuries, poor performances and benching. It can also be employed at a certain week in the season. Lots of leagues turn it on starting in Week 15 of the NFL to support their last two weeks of their fantasy league championship. Other unique league features can be found here. We are legal worldwide for offering non-public cash leagues. The states that won’t allow cash payouts are Arizona, Iowa, Louisiana, Montana and Washington and the player must be 18 for these leagues. We provide this restriction up front and cannot cut payout checks to players in these states.

G9: How much does it cost to join and what do you get for your money?

BP: Joining the site is free as are the majority of our games. Our commissioner leagues are $25 and provide full configuration options. The public league cost depends on the contest and payout. Maximum Fantasy Sports pays out 90 per cent of the cash pool in public leagues, which is tops, or tied for tops, in the industry. We do have to keep some money to help offset the large costs of development, maintenance, transaction, statistical and data costs. 

G9: Why is your operation legal and why isn't it considered gambling? Is there really any difference between guessing which team will have a good day and win a game, which is gambling, and guessing which players will have good days, which is legal fantasy play?

BP: Our operation is legal as we adhere to the guidelines included in the Unlawful Internet Gambling Enforcement Act. This allows us to collect and pay out prize money for fantasy football leagues only, not pools. For the various pools that we offer, they are run privately and, if money is collected and paid out, it is done outside of our website. We cannot collect and distribute cash for private leagues. My personal opinion is that all of these games are gambling, but so is poker and so is the stock market. Where do you really draw the line? “Risk-taking” is PC phrasing for “gambling." There are regulations, penalties and fraud watchdogs in place for the stock market. With the billions that are risked in gaming, fantasy sports and poker, the government should move forward with a similar approach to allow, but regulate it.

G9: How did you get into the fantasy sports business? Can you tell us about your personal background?

BP: I have been playing fantasy sports since I was a kid using baseball cards, dice and See-Action Football projection slides. After leaving my parent’s house and beginning my adulthood, that youthful exuberance for fantasy sports followed me and I began running my own fantasy leagues on notepads with co-workers and friends. The birth of the Internet made running leagues much easier, especially when co-ordinating with friends in different towns, but the companies operating the fantasy sites did not offer the vast features that I incorporated into my personal fantasy leagues. Instead of dumbing my games down, I joined forces with friends and built Maximum Fantasy Sports. We built the site for the devout fantasy football players with features that no other site offered. The majors, Yahoo, ESPN and CBS, have since incorporated a few of our unique features, but we still have many more that they are not willing to attempt to incorporate into their offerings.

G9: How are you preparing to compete against the commercially successful DraftKings and FanDuel?  Both companies have attracted significant investment monies recently, so are you preparing to do the same?

BP: The best way to compete is to offer products that the industry leaders do not. That component is part of our current season-long fantasy leagues and pools. For the daily and weekly league competition, our best bet right now is to offer alternative games to the salary cap games. We currently run leagues that allow you to build your best team without the constraints of a salary cap (Best Team), with different scoring configuration (TD Only) and can utilize our draft control when assembling teams in smaller competitions. Leagues such as these really allow players to showcase their strategies for building a winning team. With the flexibility of our league configuration backbone, we will continue to build innovative games to attract true fantasy football players. It is difficult to compete with the lottery-winning approach that DraftKings and FanDuel advertise. I believe that once players realize how few people, percentage-wise, actually get paid out, just like the lottery, that we can attract more business to our games. Seeking investment monies is tops on starting the 2015 season.

G9: What has been the growth rate of your business since last year?  What is the driving force behind that growth?  Has the media coverage fantasy is getting this season translated into a boost for your own business? And how many paying customers do you have right now?

BP: We were relatively flat this year. It is the first season that we broke into the daily and weekly segment and we were not ready at the start of the season. With our development in place, we are expecting a much bigger 2015 as our games are in place and our budget allocation will fall heavily towards advertising versus development. I don’t believe the media coverage has helped us much. I believe it has helped the majors only. We have 70,000 registered users but I have not asked for reporting on active users and a breakdown of users and the types of games that they are playing.

G9: What is an average fantasy player worth?  How much will he or she spend on daily fantasy games in a given year?  How does this compare with season-long contests?

BP: Metrics are not quite ready in this segment as we are new to that portion of the game. We are seeing an average spend of $50 per week at this point, which I would suspect is about the national average. The weekly spend will always be much greater in total than the spend on season-long contests due to the one-time investment versus the possible 21 weeks of investing and re-investing. Many players do play in multiple season-long leagues, but in total, the average will be about $250 for this vertical of players.

G9: Can you compete with the likes of ESPN and Yahoo should they enter daily fantasy sports, as is rumored?

BP: I am not sure ESPN will enter into this field. They have not offered public season-long leagues for cash at this point so I don’t think they want to play a role in hosting daily leagues. For Yahoo, we will compete with them the same way we do with FanDuel and DraftKings, which is by offering better products and a different version of the popular games so players have access to variety. I hope that Yahoo does enter the fray and strictly goes up against these companies with the same product. We will continue to stand out in the crowd by offering a different flavor.

G9: Would it make sense for a fantasy company like yours to team up with an online sportsbook partner, such as Bookmaker.eu or Sportsbook.ag out of Costa Rica or one of the European books such as Paddy Power of Ireland or William Hill of the U.K.?  Such a partnership would give you a ready-made customer base of sports-betting fanatics, so have any such companies approached you or vice-versa?

BP: It is interesting that you ask that. We used to run a little picks service and had affiliations with various sportsbooks back in the latter 2000s. I mentioned working closer with us to those companies on a fantasy football tie-in, such as offering prop bets for fantasy points and using us as the backend for generating and posting those results, but they balked. Their focus at that time was to simply get players in the door for standard wagering and poker. With some of the legal constraints being eased, I believe that this is a good time to propose that relationship again. Since we have expanded our offerings in the time that has elapsed, I believe that the fit is even stronger. Additionally, we have “white labeled” our site for other companies and think it would be a quick, inexpensive way for sportsbooks and/or casinos to host their own presence.

G9: Where are you based and why have you chosen that location? And are you considering branching out into other locations?

BP: We are based in Chicago and have no plans on leaving. I moved to Chicago in 1990 and fell in love with the city. I have been traveling much more than desired than past few years and don't spend near as much time as I would like in Chicago, but I still call it home.

G9: What do you see as the fantasy highlights thus far of 2014, both the highs and the lows?  For example, what players have crushed your customer base and who are the big money-makers so far?

BP: It's easy to give you the fantasy low; our daily and weekly leagues were not ready before the start of the season. For the high, it would be positive feedback from our customer base. People are quick to offer criticism and complaints but it is difficult to get a compliment, so you know you are doing something right when you get props for your hard work. We have not received permission to use players’ names in any promotions.

G9: What is the most money anyone has earned playing with you?

BP: Suffice to say, no one has retired off our games yet. We do like to structure our games so the top tier of players get paid out, not just a select few, unless it is a lower-volume challenge, such as our Mano y Mano head-to-head games.

G9: Do you have many female players? What percentage of your customer base is female? Are there any significant differences in the way female customers play fantasy as compared to male players, as far as strategy, tactics and expectations are concerned?

BP: There are many female players but the large percentage of those are involved in playing in our various pools over the fantasy leagues. We have not analyzed their strategies in fantasy leagues but I would not expect them to play much differently than males, except that I do not believe they get attached to players from their favorite team as tightly as men do. We seem to always have at least one player from our hometown squad on our teams.

G9: What is the basic demographic of your paying customer? If it mirrors the demo of the average American sports bettor, it would be white and male with a high level of education and income, although the age for fantasy players would be lower on average than the age for sports bettors. How accurate is that assessment?

BP: That assessment is spot on. The average age for fantasy is lower due to the ability to play for free and interest in the NFL starts much earlier than the interest in betting, though it does seem to be the perfect springboard.

G9: Where do you expect fantasy in general and your company in particular to be a year from now? Do you expect legal sports wagering to become more widespread in the U.S. in the coming years? If you do, how would that affect fantasy?

BP: With all games in place and a focus on advertising, I expect exponential growth in 2015. I expect sports gambling to be legalized, though it will still take a few years. There was a day when no one thought marijuana would be legal, but that barrier has been breached a state at a time. With New Jersey pushing hard to get sports betting legalized there, it is a step in the right direction. They were stopped, but they will keep arguing it and some common sense will work its way in, but regulating it is the difficult part that will prevent it from happening for a few years. It would be a benefit for fantasy since it will legalize the betting on pools. I would like to see a provision made for those games before full-blown sports gambling is legalized in more states since pools like survivor pools are a far cry from actually betting against the spread.

G9: Is there anything else you'd like to add that you haven't been asked about?

BP: I would like to remind your readers to not discount smaller companies. Many times over, the product is better, more innovative and better supported. One area that we are ranked highly at each year is our customer service. We do make sure that our players have their questions answered immediately and that any issues are resolved as soon as possible.

By Tom Somach

Gambling911.com Staff Writer

tomsomach@yahoo.com

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