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Masters 2015: DraftKings $1 Million Prize Could Be Biggest Fantasy Golf Haul Ever

March 12, 2015

Last Sunday, Zach Turcotte sequestered himself in the basement of his St. Paul, Minn., home for what he knew would be another emotionally charged afternoon of golf watching. With NBC and Golf Channel simulcasting the final round of the WGC-Cadillac Championship from Doral, Turcotte flipped between the telecasts, calculating the significance of various birdies and bogeys, while obsessively refreshing a leaderboard on his phone. Within arm’s reach: a glass of 18-year Macallan, for the nerves.

The 36-year-old husband and father of two had a rooting interest. In fact, he had several of them: Dustin Johnson, J.B. Holmes, Bubba Watson, Shane Lowry, John Senden and Jamie Donaldson. Those six players comprised the most promising of a half-dozen lineups that Turcotte had paid $1,800 (or $300 per lineup) to submit into a high-stakes fantasy golf contest on DraftKings.com, a burgeoning website that runs daily and weekly fantasy sports competitions for cash prizes that climb into the six figures.

Daily and weekly contests are a relatively new phenomenon in the fantasy sports world, but they have proven to be wildly popular — not to mention wildly lucrative for the companies that administer them. Gone are the days when fantasy enthusiasts’ only option was to ride one squad for the duration of a season. Now, with the rise of the two biggest players in the industry, FanDuel and DraftKings, along with a slew of smaller start-ups, fantasy fans can live and die with one team in their sport of choice — football, baseball, basketball, golf, soccer, mixed martial arts — and then hit the reset button the next day with an entirely new roster.

There are contests for all comers. The antes for DraftKings’ Doral competitions ranged from 25 cents (for a “Micro Millions” event that awarded a modest $250 for first place) to $10,600 (for a mano-a-mano match-up that paid off $20,000). Turcotte’s high-roller event, which the site dubbed the Miami Classic, paid a cool $100,000 for first place, $40,000 for second, $20,000 for third, and on down the line.

Golf is a relative newcomer to the weekly fantasy landscape, but it is rapidly gaining popularity. Since DraftKings rolled out its golf offerings in January 2014, its number of golf users has grown more than eightfold, says DraftKings spokesperson Femi Wasserman. In February, more than 25 percent of DraftKings’ active users, perhaps jonesing for a fantasy fix in the wake of the NFL season, participated in a golf event. Presumably many more will join the mix in April, when the site runs a $20 buy-in Masters bonanza with a $2.2 million purse. First prize is a million bucks, which is thought to be the highest payout in fantasy golf history.

DraftKings declined to say specifically how many users have participated in one of its golf contests or how much revenue the contests have generated. But in terms of total users, golf has already leapfrogged college basketball and college football. (In 2014, the company cleared about $30 million in revenue across all its sports.)

“We anticipated golf would be popular. That’s why we launched it,” Wasserman says. “But its growth has surpassed our expectations.”

Wasserman credits the strong sense of community among golf fans, or the “network effect.”

“It’s pretty huge and more powerful than a lot of other sports,” she says.

Tim Finchem hasn’t publicly endorsed sports gambling, as NBA commissioner Adam Silver did last November. But on Tuesday the Tiger Woods Foundation announced a partnership with DraftKings. Under the agreement DraftKings will be designated as the “Official Daily Fantasy Sports Partner” of two PGA Tour events: the Quicken Loans National and the Deutsche Bank Championship. “DraftKings will bring the action to the next level,” said Rick Singer, Tiger Woods Foundation president and CEO. (“Action” was an interesting choice of words given that fantasy providers refute the notion that daily and weekly fantasy is a form of gambling; they view it purely as entertainment.)

FanDuel, which launched in 2009, generates far more revenue than DraftKings: $57 million in 2014 on $622 million in player entry fees, according to the company. But it has not yet introduced golf. FanDuel spokesperson Justine Sacco declined to comment for this story, but industry-watchers suspect that part of FanDuel’s hesitancy may stem from the sticky legal questions surrounding weekly fantasy golf.

Online sports gambling was outlawed in 2006 under the Unlawful Internet Gambling Enforcement Act. But there was an exemption written into the law for fantasy sports that meet specific requirements, one of which is that the outcome of a fantasy contest must hinge on multiple events. For example, when fantasy team managers draft a football roster for a weekly contest, they’re effectively weighing the prospects of players competing in 16 different NFL games, or events. In golf, not so much. One tournament is technically a single event. Therefore, legal experts say, weekly fantasy golf could potentially be deemed unlawful under the UIGEA.

“For a very large fantasy sports web site that is attempting to build relationships with the professional sports lobby overall, it seems to be risky if not downright foolish to enter into a market for daily contests in a sport such as golf,” says Marc Edelman, who specializes in gaming law as an associate professor of law at the Zicklin School of Business at Baruch College, City University of New York. “It would be so easy to combine two different golf tournaments together and to attempt to make a good-faith argument about multiple events. While no one has challenged this under the law to date, it seems to be a very easy fix to make. Not making that fix seems to subject certain companies in the industry to risk that others have wisely avoided.”

I. Nelson Rose, an expert on gaming laws and a professor at Whittier Law School in Costa Mesa, Calif., is less critical. “Usually I could have a pretty good gut feeling about these cases,” he said. “But in this case there really are pretty good arguments both ways.”

When asked how DraftKings interprets the law, Wasserman said the company views a golf tournament as “several games in one. So we look at each round as an individual game.”

“We wouldn’t have launched [golf] if was a concern,” she said. “We’re pretty rigorous about our examination of the law and to try and make sure we’re compliant with all the regulations.”

Edelman, who has represented several fantasy sports sites (though neither FanDuel nor DraftKings), said “it astounds me with the golden goose that has been created with daily fantasy sports how some companies have been continuously pushing the envelope further when they’re already enjoying a large revenue stream.”

But he also said that he hasn’t seen much evidence that regulators are likely to crack down on golf or other “borderline” sports.

That’s good news for Turcotte, who last weekend competed against more than 1,100 other lineups in the Miami Classic. The DraftKings format is simple: Participants are given a salary cap of $50,000 with which to draft six golfers, all of whom are assigned a value. (At Doral, favorite Rory McIlroy was valued at $15,300, long-shot Australian Steven Jeffress was priced at $5,200, and the rest of the field fell somewhere in between.) Points are awarded on a sliding scale for pars and better, and deducted for bogeys and worse. The top 50 finishers receive additional points based on where they place. The key is drafting the right mix of superstars and B-listers who are primed for a big week.

“It’s like picking stocks on Wall Street,” Turcotte said. “Except you can get more information on golfers than you can on most companies.”

Turcotte pores over stats and records in preparation for the contests, and he’s not alone in his devotion. “About 20 to 30 guys are pretty hardcore players,” he says. “You see them week in and week out.” Some of the top players also excel in fantasy football and other sports; others are professional gamblers with deep pockets and elaborate betting schemes. Your office golf pools run by Lenny in accounting these are not.

A glimpse at the PGA Tour forum on Rotogrinder.com, a fantasy sports site, indicates that fantasy-golf fans leave few stones unturned. In the run-up to Doral one commenter posted: “Gonna watch the weather report and fade McIlroy if the wind is blowing. He was on the Golf Channel talking about how the wind really screws up his naturally high ball flight. Might roll with Patrick Reed and Adam Scott.”

Another post: “I refuse to enter a lineup without [Jordan] Spieth in it. I’m all about exposure.”

And another, presumably from a fantasy team manager seeking a value pick: “What do you guys think of Anirban Lahiri?”

Every bit of information and insight helps. Turcotte hold downs a full-time job (he asked that I not reveal his profession in this story), but he treats his fantasy pursuits almost as a second job, dedicating six to eight hours per week to prepare for the upcoming tournament. He and his friend Jeff Bergerson are so passionate about their hobby that, in 2014, they founded FantasyGolfInsider.com, on which they dispense fantasy golf research, commentary and advice. Bergerson says the site’s traffic has tripled in the last year.

“I can’t believe how much fantasy golf has taken off,” he says. “Last year for this same event [at Doral], the biggest contest on DraftKings paid $10,000 to the winner. This year it’s $100,000.”

Bergerson says golf has great appeal as a weekly fantasy sport because you get the rush of four days of action from one entry and because managing a team is fairly low maintenance — if you want it to be. You can draft your lineup early in the week and be all but certain, barring any freak injuries or players’ wives going into labor, that your team will show up and play.

“If you’re going to do a basketball lineup, you have to be in front of your computer at 5 o’clock Eastern to make sure that all of your guys are in the lineup that night,” Bergerson says. “You don’t want to get Greg Popovich-ed when he sits half his team.”

Turcotte got the opposite of Popovich-ed at Doral. Through 54 holes, his most productive roster, led by Holmes, Johnson and Watson, was in second place, and another of his lineups wasn’t far behind. The only thing sitting between him and $40,000 was the final round on an overcast day at the beefed-up TPC Blue Monster. Turcotte asked his wife and kids for a few hours of Dad time and repaired to his basement.

Turcotte sounds rational and even-keeled over the phone, but when he’s watching a Tour event tied to his fantasy interests he says he is an “emotional viewer,” which you can understand given the stakes. If he’s not hollering at the TV, he is probably texting Bergerson or one of his other fantasy buddies about a deplorable double-bogey or soul-crushing three-putt. Sometimes Turcotte’s correspondences are reduced to “angry emojis.”

Turcotte’s big guns delivered down the stretch at Doral, with Holmes, Johnson and Watson battling for the lead before Johnson emerged victorious. The players deeper down his bench, however, weren’t as cooperative. Senden shot a Sunday 74 to drop nine places from his 54-hole position into a tie for 31st. Donaldson double-bogeyed the 72nd hole to shoot 75 and slide 15 places into a tie for 44th.

And then there was Lowry.

After a birdie at 16, the amiable Irishman had climbed into red figures and was cruising toward a top-10 finish, which, by Turcotte’s estimations, would have secured Turcotte the 40 grand.

Then came an excruciating Lowry bogey at 17.

And another at 18.

Lowry slipped into a tie for 18th.

“Those two holes cost me $11,000 or $12,000,” Turcotte said Sunday evening, still smarting from the shakeup.

Still, he couldn’t be too distraught. His best lineup finished fourth, good for $10,000. A second well-performing roster banked him another three grand. His net haul: about $11,300, which is more than Frank Lickliter earned for finishing 19th in last week’s Web.com event.

“A typical day of fantasy golf,” Turcotte said.

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