During the first two weeks of the NFL season the FanDuel Sunday Million guaranteed prize pool tournament yielded large overlays. FanDuel has responded by increasing the amount of rake taken from all guaranteed prize pool tournaments and many contests with buy-ins of $25 or less.
Starting with Week 3, FanDuel has increased rake to 15% in the Sunday Million. By comparison, DraftKings currently charges 13.5% rake in the Millionaire Maker. The DraftKings Millionaire Maker has also seen its prize pool lowered from $5 million to $4.4 million, but the rake has remain unchanged so far. However, it should be noted that some of DraftKings lower entry contests rake at 15%.
Many players have predictably panned the changes, noting that new and future regulatory costs have possibly played a part in rake increases.
Some are hopeful the changes are only temporary. Unfortunately for players, the fear is that once rake increases it likely does not go down. The good news for players is that at least while the tournament continues to overlay, the effective rake will still be lower than the potential overlay.
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What is daily fantasy rake?
Rake in daily fantasy sports is the fee taken to administer real money contests. Rake the primary method that DFS sites use to bring in revenue. How is rake determined? If 100 players enter a $10 contest — which equates to $1,000 in buy-ins — $900 will typically be given as prizes to top finishers while $100 (or 10%) will be taken as rake.
Daily fantasy rake is taken from each real money contest that a site runs. Typically, DFS sites assess anywhere from 5%-15% of a total prize pool as rake. Generally speaking, the higher stakes the lower the rake will be.
What is a daily fantasy overlay?
A daily fantasy overlay occurs when a guaranteed prize pool is not paid in full by buy-ins from players. Because the contest is guaranteed, the prize pool still needs to be paid but the DFS site must add their own funds to cover the overlay.
Compelled by the recent overlays? You too can easily find overlays by using SuperLobby or by figuring it out for yourself. You can calculate overlay by multiplying the entry fee by the number of entries. For example, if you enter a $1000 guaranteed tournament with a buy-in of $10 and 90 players enter, the overlay would be $100 ($1000-($90*10)). The value per player would be $1.11, enough to cover most of the rake in the tournament.