Updated story: Yahoo says it made an error in the number of DFS players.
Yahoo CEO Marissa Mayer said that her company’s daily fantasy sports product attracted 1.3 million users over its first two weeks, a number that does not appear accurate from anecdotally following the site’s launch.
What Yahoo’s CEO said
Mayer was speaking for her company’s earnings call for the second quarter of 2015. During the call, she briefly touched on Yahoo’s DFS product, which launched two weeks ago. Here is what she said:
In the two weeks since launch, over 1.3 million users have tried Daily Fantasy sports and the number of players on our daily games has already exceeded our early expectations. What’s more, approximately half of all the users who play Yahoo! Daily Fantasy sports are paying users and we see this percentage increasing over time.
That figure was also offered in a Wall Street Journal story that came out of the Yahoo call.
So has Yahoo actually gotten 1.3 million users to try its DFS product? That seems unlikely, and there appears to be a disconnect between what Mayer said and what is actually going on at Yahoo.
You can read the full transcript here.
1.3mm users have tried Yahoo DFS?
Legal Sports Report has not tracked the entrants of every contest played since Yahoo at launch, but we have checked in on its guaranteed contests almost daily to see its progress.
When we see the phrase “1.3 million users have tried Daily Fantasy sports” — and the 650,000 paying players, or half of 1.3mm — here is what a reasonable person would take that to mean:
- A “user” who has tried DFS is someone who entered a DFS contest.
- A “user” is a unique user, meaning 1.3 million different people have played Yahoo DFS.
The phrase “tried” used by Mayer also would seem to indicate some sort of active engagement, like playing a contest, not just looking at the DFS lobby. If we use that understanding of “user” and “tried,” it seems unlikely that Yahoo has actually met those figures. That could mean there’s an issue in how DFS usership was presented in the call.
Also, a user for Yahoo DFS is somewhat different from a user for a traditional DFS site. Anyone who already has an account with Yahoo can access the free contests, with no extra steps or sign-up required. And people who already play season-long fantasy — on the web and iOS platforms — now have easy access to the DFS product. (A separate download isn’t required, just a click of a button from a browser or an update to the app.)
It’s much easier to classify a “user” at any other DFS site, as they actively have to sign up for the site and/or enter contests.
Assumptions made to get to 1.3mm
Yahoo launched two weeks ago, but during that time, Major League Baseball had its All-Star Game break. That means contests have not been running continuously for the two weeks.
Mayer spoke on Tuesday, so even if we count that day, that means Yahoo had offered contests on 10 days, since MLB is its only product, currently. If that’s the case, then we’re to assume, based on Mayer’s figures, that Yahoo DFS has generated:
- An average of 130,000 new users (free and paid) per day
- An average of 65,000 new paying users per day.
That would be an amazing feat for Yahoo. But is it really possible?
Anecdotal evidence from Yahoo
Here’s some evidence that would point to the idea that there are not 1.3mm users taking part in Yahoo DFS contests:
- For Wednesday’s Yahoo offerings, if every contest fills that is currently in its lobby, that would generate somewhere in the neighborhood of 25,000 entries. That almost certainly won’t happen, though, based on Yahoo’s entry rate for contests so far. If we take that to be an average day at Yahoo, that would mean about a quarter of a million entries have been available over Yahoo’s 10 active days. And that’s maximum available entries, not entries that were made.
- A freeroll on Tuesday with a maximum of 10,000 entries failed to fill. Only 7,386 people entered.
- A Friday contest with a $1 entry fee, in which every player who entered got at least $2 back, was less than half filled. There were only 2,944 entries out of a possible 10,000. (There was also controversy about how this contest was run.)
- In paying contests, a $10,000 contest on Friday with a maximum of more than 11,000 entries was only a little more than half full, with over 6,000 entries. A $50,000 contest on the day after launch (July 9) was the biggest Yahoo has offered. It also featured a huge amount of overlay, as it was only about half full.
Based on those examples, it’s difficult to see how Yahoo got to 1.3 million users, or 650,000 paid users. All of the contests referenced above would have easily filled if Yahoo’s user claims are correct.
We have not actively watched Yahoo’s cash games, but based on the numbers in the guaranteed contests, it’s not believable that that makes up the gap.
We can say with confidence that DraftKings and FanDuel have both had far more activity since launch based on internal data, and Yahoo’s claim would outpace both. The most entries Legal Sports Report observed on a single day was under 12,000.
What else could 1.3mm refer to?
We think it’s pretty clear that 1.3 million people haven’t actually played Yahoo DFS. So where is the disconnect on the numbers? Some possible explanations:
- 1.3 million users have clicked on the daily fantasy product, but haven’t actually played a contest. And then half of the players who have actually tried DFS out of those have deposited/entered a paid contest.
- “Users” is being substituted for “entries.” But even 1.3 million entries seems extremely high, based on anecdotal evidence above.
- Is it actually possible someone just added a zero to the number of users? The idea that there have been 130,000 unique users, and 65,000 paying users, is at least feasible.
- Yahoo is intermingling numbers for its active season-long MLB fantasy users with daily users.
Yahoo is still new to the space, and some hiccups are expected — after all this amounts to a beta test before NFL season. If there had been 1.3 million people playing at Yahoo, its DFS launch would be deemed an overwhelming success that far outpaces any projections anyone had. To believe that 1.3 million users have tried Yahoo DFS defies logic.
Disbelief from industry experts
A lot of people who follow the industry have questioned Yahoo’s numbers:
This is a tough number to believe. 1.3 million page views maybe? https://t.co/vYKIr1aACK
— dan strafford (@DanStrafford) July 22, 2015
@DustinGouker @BillyPolcha yeah they seem absurdly high at this point in time
— Adam Krejcik (@akrejcik) July 22, 2015
@akrejcik @DustinGouker @BillyPolcha maybe someone added a zero and should be 130,000 users?
— Michael Rathburn (@FantasyRath) July 22, 2015
@DustinGouker very fair question.
— Matthew Berry (@MatthewBerryTMR) July 22, 2015
Photo by Scott Schiller used under license CC BY 2.0.
