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Risk it for the Biscuit
Top-Heavy Contest Winners Take Regular Losses to Hit the Jackpot
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In this blog post, we show how winning the top prize in guaranteed prize pool (GPP), or top-heavy, contests requires risky lineup strategies that lose money more often than not. We focus on large (100k+ contestants), high-payout (10000X+ profit potential) contests that allow up to 150 entries where the winners are usually using lineup optimizers for bulk entry.
Since there is fierce competition for the small portion of top scoring entries that pay out, entrants commonly adopt high risk strategies such as heavy lineup stacking to maximize their point scoring ceiling. Although we expect lower floors as well with riskier entries, we were surprised to see just how much losing that jackpot winners were doing in off weeks. We illustrate this here by showing a weekly profit analysis for select top-heavy contest winners on DraftKings, and then break down the main takeaways and what this means for your DFS strategy.
Profit Analysis of Top-Heavy Contest Winners
An analysis was performed to study the weekly profits for top contestants in the same top-heavy DraftKings contest over the course of 10 weeks in 2021. The contest considered was the $0.50, mini-MAX contest for the all-day Sunday game slate. The contest allows multi-entry of 150, has 200-300K+ contestants, and pays out a top prize of $10k or $15k depending on the week.
DraftKings NFL mini-MAX $0.50 contest.
For each week, we determined the net profit for every contestant in the contest as the sum of their winnings for all lineups entered minus their total entry fee ($0.50 x number of entries). We then selected the contestants who won the first place prize from weeks 5-15 and looked at their weekly net profits, including the week they hit the jackpot.
For example, the plot below shows the weekly profits from the mini-MAX $0.50 contest for the 1st place winner in week 10. You can see that, besides winning the top prize of $10k and a net profit of $10077, this contestant lost money in each of the remaining 10 weeks. Note that the biggest loss in a given week is $75 when entering the maximum of 150 entries, so some of the weekly losses were substantial. For this contestant though, the regular losses from a risky strategy was clearly worth it given the size of their week 10 jackpot.
The net profit in weeks 5-15 for the week 10 first place winner in a $0.50 mini-max 150 entry DraftKings contest.
This weekly profit visual was recreated for eight different weeks in the 11 week span, with the result shown in the figure below. It can be seen that for the most part, the 1st place contestant from any given week is consistently losing money in the other weeks throughout the window considered. Two exceptions worth mentioning are 1) the week 7 1st place winner also had a good showing in week 15 ($258 profit), and 2) the week 15 1st place winner won by submitting only a few lineups (impressive!) rather than a bulk 150 lineup entry, so they experienced only minor losses in the remaining weeks.
The net profits for select contest winners between weeks 5-15.
Bottom Line
You need to risk it for the biscuit! Winning large, top-heavy DFS contests requires a riskier lineup construction strategy to maximize scoring potential. But vying for the top spot requires accepting the reality that losing money will be a natural part of the process. Successful DFS players adopt approaches to stay afloat and not go bust while pursuing large payouts, including bankroll management strategies. Two quick pointers here:
Balance high-risk and high-reward top-heavy entries with lower-risk and lower-payout cash contests - a common rule of thumb is a 80/20 or 70/30 split
Only wager a small percentage of your entire bankroll (~10%) on any given day
For more tips for successful bankroll management, see these other resources:
