Death of Fantasy Sports?

I read a recent blog post by Ryan Houston at http://www.ryanhouston..com/ entitled "Fantasy Sports is played out".

I do not agree with all of his hypotheses but he does make some valid points about the pay to play fantasy sports contest model.

"Next thing you know – there is upwards of 15 companies now offering the same game. What did they do differently? Basically nothing. They added some “factors”, “bells & whistles” and “upgraded graphics.” They may have changed some game mechanics but basically they were all the same. So what happens? The guys that got out early are maintaining their market share despite the new entries into the space, so the rookies have to get desperate. So what do they do? Raise their prize payouts. So now you have 15+ companies all competing against each other for prize payout when the margins in this game are too slim to begin with. I’ve seen payouts as high as 94%. Listen to me — I don’t care what anyone says — you are NOT making any money on a 6% rake. You aren’t making any money on a 10% rake. You THINK you are — but you aren’t and you will not be successful long-term. You have to cover server costs, credit card processing fees, staffing fees. You are not going to win by offering the lowest “rake”. You simply can’t scale big enough. It will take MILLIONS of eyeballs and you can’t get there."

What can fantasy players get out of this message?

Watch the payouts and the companies paying them. We in the fantasy football community have been hurt in recent years by several companies who went belly up and failed to pay winners.

You owe it to yourself to do due diligence before investing hard earned dollars in any contest big or small.

Fantasy Football Tips: 201 Ways to Win through Player Rankings, Cheat Sheets and Better Drafting ($10.95) www.amazon.com/dp/0982428669

Fantasy Football Basics: The Ultimate "How to" Guide for Beginners available ($10.95) at Amazon http://www.amazon.com/dp/0982428634

Fantasy Football Guidebook (2nd Edition): Your Comprehensive Guide to Playing Fantasy Football ($19.95) http://www.amazon.com/dp/0982428650

Fantasy Baseball for Beginners: The Ultimate "How-to" Guide ($10.95) www.amazon.com/dp/0982428693