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Abstract
Despite its explosive growth in North America, relatively little research has been conducted on the gambling implications of fantasy sports. The current study examines whether financial information (i.e. entry fee and payout) in an advertisement promoting a fantasy football service influences perceptions about opponents' perceived skill level and expected outcomes. This study also examines the impact of perceived opponents' skill and perceived winning expectations on the desire to participate in the advertised fantasy sports service. Findings indicated that entry fee and reward information significantly increased the participants' expectation of opponent quality, but that this expectation did not result in decreases in the subjects' self-reported probability of winning the league. Additionally, subjects indicated that they were most likely to join a league in which the expected opponents' skill level was nearly equal to their own. In the presence of an advertised monetary reward, however, perceived winning probability also became an important factor in participation decisions. The former result suggests that participants in fantasy sports, especially in free-to-play leagues, are purchasing an experiential product with a value that increases in outcome uncertainty, while the latter implies that participants are motivated both by the overall experience, and by financial gains when they are available.
Acknowledgements
This work was supported by the Office of the Vice President for Research at the University of Michigan.
Notes
1. Here our main interest lies in the possibility of increased utility in winning (Sheremeta, Citation2011) from defeating higher quality opponents or those viewed as similarly skilled to the respondent (peers).
2. We note that there are variations on this format, as with the points format, and there may be more categories than five each for pitching and hitting.
3. This assumes entrants are not colluding to put forth low effort, leaving the tournament outcome subject to random fluctuations while entrants split the prizes.
4. While a difficult website to navigate may mean more time spent by fantasy players, we assume that in the long-run, a poorly managed host site would ultimately lose its consumers to one that could be more easily navigated.
5. Participants of fantasy sports could gain utility from player research, social interaction or some other effort behaviour involved in the game. There is variation in player utility from participation, as noted by Farquhar and Meeds (Citation2007), and this is an important consideration when comparing fantasy leagues or other similar tournaments to those in the traditional economic literature. For now, we assume that effort is a cost in achieving some combination of both intrinsic and extrinsic reward from winning a tournament.
6. Those without a fee, however, will still require time and effort devoted to them.
7. We again note that many fantasy sports leagues are formed among friends or colleagues, and therefore restrict our discussion to those leagues which are anonymously joined.
8. Our hypothesis assumes that higher-skilled players are more likely to pay entry fees (take on costs) and are attracted more strongly to extrinsic reward due to a self-perceived higher probability of winning.
9. This is also consistent with the predictions of Rottenberg (Citation1956) and El-Hodiri and Quirk (Citation1971) in the context of spectator interests in competitive balance for professional sports, in which excitement or interest in the competition is greatest when the outcome contains at least some uncertainty. It may be that participants also enjoy uncertainty in the outcome of fantasy leagues.
10. Two more respondents were removed from the sample as they did not include information regarding income, leaving the final sample size for our regression analyses at 236.
11. This fee was benchmarked from the most popular pay-to-play service (CBSSports.com, Citation2011).
12. This interaction was removed for presentation of the results, in favour of parsimony.
13. This was not the case for the models of participation intention. In fact, the use of the skill difference variable marginally increased the explanatory power of the model for participation intention. The results of this alternative model are not presented here but can be provided upon request.
Additional information
Notes on contributors
Brian M. Mills
Brian Mills (PhD) is an Assistant Professor with the Department of Tourism, Recreation and Sport Management at the University of Florida. His research interests encompass topics such as the sports labour market, industrial organization and sports league policy (demand, competitive balance, revenue sharing, etc.), public policy and economic development related to sport, and advanced analytics in the sports business. He is especially interested in applying economic lessons and quantitative analysis to problems that sport managers face in their everyday decision-making.
Dae Hee Kwak
Dae Hee Kwak (PhD) is an Assistant Professor of Sport Management at the University of Michigan, USA. Prior to joining the University of Michigan, he was Assistant Professor of Sport Marketing at Indiana University. His research focuses on sport consumer behaviour with an emphasis on how both emotional and cognitive factors derived from sport-related stimuli influence consumers' decisions and behaviour in a variety of sport consumption contexts, including fantasy sports and March Madness. He is interested in exploring the gambling implications of fantasy sports, particularly in the young adult population.
Joon Sung Lee
Joon Sung Lee (MS) is a doctoral candidate in the Sport Management program at the University of Michigan. His research interest is in consumer behaviour and consumer psychology in the sports-related consumption setting.
Woo-Young Lee
Wooyoung Lee (PhD) is an Assistant Professor of Sport Management at the University of Central Missouri. His research focuses on the influence of sport consumption behaviours, such as risky sport participation and sport media consumption behaviours. His work also focuses on identifying the influence of gender difference and personality traits on sport gaming behaviour.