The best payout structure for any fantasy sports league
One of the best things about fantasy sports is that every league can set its own buy-ins and payouts. Unlike sports betting, you don’t have to worry about predatory sportsbooks and the house edge guaranteeing only the best of the best have even a chance to win money.
You don’t have to worry about Daily Fantasy providers like DraftKings and FanDuel with their own rigged payout structures that result in more than 90% of users losing money in the long-run.
With fantasy sports, it is just you and your league-mates. You choose a buy-in that everyone in the league is comfortable with, and then 100% of that buy-in is paid back out as prizes. The only question that remains is how much should the winner get and does anyone else deserve a cut?
The problem with winner-take-all
Most fantasy sports leagues tend to go with a winner-take-all approach. Its appeal is understandable. It is extremely simple and at the end of the day, it is sports in its purest sense. You either win or you lose. There is no in-between. There is no second place. It’s just as Vince Lombardi would have dreamed it up.
But winner-take-all also has many drawbacks. First of all, it offers no incentive for players to continue to try after they know they will miss the playoffs. Nothing is more frustrating than being in a fantasy sports league with players that have given up on the season after a few weeks. They start the season 0-3 and then they don’t set their lineup. They trade their best player for a case of beer.
The winner-take-all model doesn’t reward players for competing and doesn’t punish players for throwing in the towel, which makes the whole fantasy sports experience much less exciting for everyone else in the league. Even giving small prizes to second-and-third place doesn’t fix this problem.
Luckily for you, we have figured out the perfect fantasy sports league payout structure for both eight-and-ten team leagues without being overly complicated.
Best payout model for 8 team leagues
When Wager Champs launches, leagues will be first available with eight-teams. So even though this article serves only for entertainment purposes, that is where we will start. In an eight-team league, we can assume that everyone buys in at 12.5% of the total pot.
1st place: 60%
First place gets by far the largest cut, and deservedly so. Some people might argue that it is too low, but at 60%, the winner is increasing their initial investment into the league five-fold. It is the perfect amount of reward to make being the champion mean a lot while still having the funds to pay other deserving members of the league.
2nd place: 20%
Second place is the first loser. Nobody is hanging a banner for second-place. Well, nobody except the Indianapolis Colts. But in fantasy sports, second-place is pretty good, and certainly deserves a nice payout. It has to be a big upgrade over third place because getting to the championship has to mean something, but it also obviously has to be much lower than what the champion receives.
3rd place: 10%
The bronze medal is still a medal. That is why they deserve their buy-in back- or in this case, just a tad bit less. In addition to just awarding the third-place team for a good season, this makes the usually sleepy third-place mean something.
4th place: 6%
In most standard leagues, the fourth-place still makes the playoffs. Throw them a bone. It’s not much, but at half their original buy-in, it is better than nothing.
5th place/Consolation Bracket Winner: 4%
Give even the scrubs something to play for! Not only does giving the consolation bracket winner a prize keep all the teams in it somewhat engaged, but it also keeps them active during the regular season.
6th place: Nothing
This is the Washington Wizards. The Cincinnati Bengals. Missouri Football. Sixth place is the very definition of mediocrity, not quite bad enough to deserve the ridicule of their counterparts but certainly not good enough to get any of the prize money.
7th place: Nothing
Being in seventh place means you played in the last-place game in the consolation bracket in most standard leagues. The prize is not being the worst. That is it.
8th place: Punishment
Ah, here we go. Even if you ignore everything else on this list, making a league punishment for the person that finishes in last place is an absolute necessity. It keeps the bottom-feeder teams in the league active. It makes sure the last-place team doesn’t cut a deal to trade all their players or tank a game to help someone else. It makes sure that in the last week, one team fighting to make the playoffs won’t have an easy win.
What should the punishment be? You know your league-mates best. Be creative, have fun with it, and agree on it as a league.
Best payout model for 10 team leagues
While I won’t dive into all the reasons because they are pretty much the same as the 8-team leagues, here is the ideal structure for a 10-team league.
1st place: 50%
2nd place: 20%
3rd place: 10%
4th place: 7%
5th place: 5%
6th place: 3%
7th place: 2%
8th place: 0%
9th place: 0%
Last place: Punishment
While we encourage users to have fun and be creative in fantasy sports leagues, this article is for entertainment purposes only and does not promote illegal gambling. Wager Champs, set to launch later this year, will offer fantasy sports betting leagues with no on-site entry fees. So start brainstorming your league’s last-place punishment now!