Fantasy Sports: A Game of Skill
Fantasy Sports is NOT Sports Betting
The distinction between sports betting and fantasy sports is crucial, as it protects the integrity of fantasy sports games that millions of Americans enjoy nationwide. Fantasy sports contests are games of skill, requiring knowledge, strategy, and research, unlike sports betting, which relies on chance. Preserving this distinction ensures the continued growth and legitimacy of the fantasy sports industry, safeguarding a beloved pastime for millions of players.
Expert Opinion by Zvi Gilula:
Regarding “PrizePicks” Fantasy Game
I was retained by SIDLEY AUSTIN LLP, via TopFund International, on behalf of SidePrize LLC d/b/a PrizePicks ("the company"), to provide an expert opinion examining 7 competitive fantasy sports games ("the games") offered to the public by the company via its software. I was asked to answer the following questions:
I. Does chance or a player's skill determine the likelihood of long-term success in the game?
II. Is chance immaterial to such likelihood?
Based on the detailed analyses reported below, my answer to both underlying questions is:
Chance is IMMATERIAL to the likelihood of long-term competitive success in winning the game for typical competitive users. Instead, skill predominantly determines the likelihood of success in the game.
I. Preliminary Considerations
It is apparent that skill, and not mere guessing, is involved in the games. The underlying skills relate to the ability to understand, process and analyze information about the performance of performers in real-world competitions. Such analysis must include the skill of comparing and ranking players, and the use recent past performance as a possible supportive variable.
However, the clear existence of skill does not necessarily mean that chance is not involved in the likelihood of winning a game, and that chance is immaterial. Thus, it is necessary to measure the role of skill vs. chance in the game.
To quantitatively measure the dominance of skill vs. chance among typical competitive users of the game, we must first define what "typical competitive game users" are. These are human users that play a sufficiently large number of competitive matches to allow their performance to be expressed and measured reliably. These users are defined as the target set and their performance serves as the benchmark for both measuring and analyzing the role of skill vs. chance and its dominance. As noted below, the target set size must be sufficiently large to allow admissible statistical analysis. Statistical inferential approach is used because the data (described below) constitute SAMPLES from the entire body of users, and inference is needed on whether sample findings can be extended to the entire population of the users of the company's games above a reasonable doubt.
Once we have defined our set of typical users, we can prove the predominance of skill over chance, if we find that:
(1) Within this set of "typical users," there exists a non-negligible subset of individuals that exhibit an outstanding number of repeated wins ("high performers")
(2) These high performers perform so much better than the average "typical player" that their exceptional win rate is very unlikely to be attributed to chance.
II. Data Description
The data I have received from the company was in a form of seven files related to the respective following seven games. Each file contains information about games played by unique users:
Power 2 (P2) with 1,316,054 users
Power 3 (P3) with 1,223,036 users
Power 4 (P4) with 1,211,062 users
Flex 3 (F3) with 1,057,267 users
Flex 4 (F4) with 845,640 users
Flex 5 (FS) with 1,196,652 users
Flex 6 (F6) with 1,043,636 users
While within each file all users are unique, it is possible that a user will be reported in more than one of the seven files.
All seven files comprise data on games played during the period January 1st, 2019 through Mid-June 2023. It only includes players who are at least 4 months old in the company's platform. The information on users' games in all files was:
Total_games - Number of games played that resulted in "win" or "loss."
Total_wins - Number of games won.
Total_losses - Number of games lost.
Time in the system (in months).
Win ratio (WR = the number of games won per number of games played) was computed by me for all platforms, and was added to the 7 data files.
By means of sample-theoretic methods and algorithms, I was able to define sets of typical users corresponding to each of the seven platforms . These are users of all platforms playing at least 20 games and no more than the upper 97.5th percentile of games played in their original respective sets.
III. Analytics: Skill vs. Chance
To be able to compare and determine the predominance of skill vs. chance we need to define "high performers". These are users that show exceptionally high performance compared to typical users in their set. The basic measure of performance is the "win ratio" (WR) - the proportion of games won out of the number of games played.
The goal is to look for the existence of users with an exceptionally high WR, and assess the probability of exceeding such WR performance at random. Such probability is defined as "tail probability".
As done by me in the past with regard to similar companies, I adopted a quite conservative approach to said probability. After careful examination of the data, I proposed to set it at 10^-6. Hence, a "high performer'' is a user that the probability of exceeding his/her observed performance (WR) at random is 1 in a million or lower compared to his/her underlying subset of users.
A proprietary method of analyzing exceptional performance under randomness, yielded the following results:
The interpretation of the ODDS is straightforward. The odds of 70 pertaining to Flex 3 platform mean that there are 70 times more exceptionally skillful users actually found than the number of such users implied by chance. This is a very strong probabilistic evidence to the immateriality of chance and to the strong dominance (salience) of skill over chance, in flex3.
In a court expert testimony (see Expert's Credentials below) where I brought up odds of 27, the court found it as "beyond a reasonable doubt".
Analogous stronger odds apply to all other platforms, i.e., flex4, flex5, flex6, power2, power3 and power4.
In summary, for all subsets of typical users, hence, for all seven underlying games, it is demonstrated that the reported exceptional performance of so many repeated wins is so strong that it leaves almost no detectible room for chance.
Conclusion
Given that high performers exist in the game with a frequency and pattern of winning that exceeds what would be predicted by a chance-based game model, I safely and strongly conclude that the games have an intrinsic character that enable skillful users to have an advantage. The element of chance is IMMATERIAL, and skill predominates, in determining the winner of games between typical users as defined in this document.
- Prof. Zvi Gilula
Expert’s Credentials
Zvi Gilula is Professor (Emeritus) and former Chair of the Department of Statistics at the Hebrew University of Jerusalem and is an Adjunct/Visiting Professor of Statistics at the University of Chicago Booth School of Business for the last 38 years.
Zvi Gilula served as an Associate Editor for about 20 years (1986-2006) in JASA-one of the leading impact-factor statistical journals. Zvi Gilula is an Elected Fellow of the Royal Statistical Society, and of the American Statistical Association.
Zvi Gilulia acted as a methodological consultant for numerous companies, such as Hoffman LaRoche (Switzerland), Solvay (Germany), Navistar (United States), Midas (United States), Fortelligent (United States), The Morningside Group (China), Agis-Perrigo (Israel, United States), Teva (Israel), Kantar (UK), TNMS (S. Korea), and more.
In addition, Zvi Gilula served as a consultant for Mifal Hapais - Israel's state lottery, and currently serves as a chief methodological consultant, and scientific supervisor for the Television Rating Committee in Israel. Zvi Gilula has provided over 100 expert opinions to law firms (with some testimonies in courts) on a wide range of subjects such as insurance, medical cases, lottery issues, Tax issues, gaming, gambling, and more.