This isn’t your grandfather’s DraftKings Sports Betting National Championship.
With nearly three years to think about what went right and what went wrong when DraftKings swung for the fences with the first sports gambling competition of its kind in January 2019, DK is trying again this Friday-Sunday, Nov. 5-7, headquartered at the EnVue Hotel in Weehawken, N.J. Some of the broad strokes remain the same for the 2021 edition: $10,000 buy-in, $5,000 starting stack, a million bucks for first place, biggest bankroll at the end of Sunday wins.
But quite a lot will be different from that wild weekend 34 months ago when amateur gambler Randy Lee was crowned the winner and professional bettor Rufus Peabody finished in a highly controversial third place. Among the differences: It appears neither Lee nor Peabody will be competing this time around.
Lee is focused on his bison farming business and, before this SBNC sequel was announced on short notice on Oct. 25, he’d committed to a weekend on the road for work that leaves him unable to set up shop in a state with legal access to DraftKings Sportsbook. Meanwhile, Peabody has activities with family and friends planned and told NJ Online Gambling, “For reasons of life EV [expected value], I’m probably not going to play.”
He elaborated: “I want to be clear, I think it’s a fantastic event. I think it’s a great idea, and I really hope it’s successful. The decision whether to play or not is just a matter of what else I have going on. If there’s a big overlay, that will change the calculation a little bit.”
N.J. one of 11 states with access
Probably the most significant of the numerous rule changes from 2019 to 2021 is one that should boost the entry numbers, limit or even eliminate overlay, and thus keep Peabody away. The first time around, all entrants had to be present in New Jersey. Now, with DraftKings’ sports betting app legal in numerous states, entrants for the second SBNC can be located in Jersey, Pennsylvania, West Virginia, Virginia, New Hampshire, Tennessee, Michigan, Iowa, Wyoming, Colorado, or Arizona.
The 2019 event attracted 260 entries and had a $2.5 million guaranteed prize pool, which left DraftKings on the hook for $1.2 million in overlay. This time around, the guarantee has been lowered to $2 million, and only $4,500 from each entry goes into the prize pool ($5,000 in the betting bankroll and $500 as a fee to DraftKings), meaning 445 entries are needed to avoid overlay. However, if you don’t count those entry fees as extra money DK would be laying out for the contest, you could make the case that only 400 entries are needed.
DraftKings Director of Sportsbook Operations Johnny Avello couldn’t share numbers in advance of the start of the event, but did express optimism that the freedom to enter virtually from 11 different states will make this more financially successful for the host company than the original version was.
“So far, it’s looking really positive,” Avello said. “We haven’t done it this way in the past, so we’re not exactly sure what that’s going to mean in terms of entry numbers from these outside states. But we definitely wanted to open it up to others outside New Jersey, and we’re expecting a good turnout. People from Nevada, people from California, they may not want to travel all the way across the country for the event, so therefore they can go to Arizona or Colorado. I’ve spoken to some players that told me they’re going to Colorado or some of these other states and entering from there.”
One participant planning to play in his home state is Cal Spears, CEO of Better Collective Tennessee (NJ Online Gambling’s parent company) and the 11th-place finisher in 2019.
“I will be playing from the comfort of my home in Tennessee this year,” Spears said. “The format is fun, but more than anything I want to support DraftKings as they push the envelope on sports betting events and tournaments.”
You can’t sweat the small stuff
That envelope is getting sealed slightly tighter than in 2019, however, when it comes to what you can bet on and when.
There are two major rule changes. One is that you can only bet on NFL, NCAA football, and NBA. No NHL, no soccer, no golf, no Canelo Alvarez fight, etc. At the 2019 event, you could bet on any market available for wagering in the DraftKings app, but this time, the menu doesn’t include the all-you-can-eat option.
“We actually went out and did a little research on what people would be interested in betting in the contest,” Avello said, “and we found out that football, both college and pro, and the NBA were at the very top of the list, so we wanted to keep it more concise instead of just spreading it out into everything. But people still have a lot of offerings out there to wager on. There’s a lot of decisions. Those decisions are just limited to within those three leagues.”
The NBA schedule available for DK SBNC wagering includes nine Friday games, six Saturday games, and five Sunday games. There will be 11 NFL games to consider on Sunday. And college football — well, it’s a lot.
If you’re a diehard sports fan and you looked at the numbers above carefully, you might have noticed that three Sunday NBA games and one Sunday NFL game are not among the options for the competition. That’s because the other major rule change brings the betting to a close early and prevents the SBNC from running deep into the night.
Implementation of ‘The Rufus Rule’
The January 2019 controversy grew out of the scramble to place bets on the late-afternoon NFL playoff game while some bets from the earlier game hadn’t been graded yet. Peabody was among those locked out and prevented from making a bet that would have won him the competition. This time, in what we’re calling “The Rufus Rule” (with full endorsement from Peabody, for what it’s worth), betting ends at 1 p.m. Sunday, no exceptions. You can bet on the 1 p.m. starts, the 4:25 p.m. starts, the 3:30 p.m. NBA tipoff, and the 6 p.m. NBA games — but all of those bets have to be in before the first NFL kickoff.
There are three NBA games starting at 7 p.m. or later that are not available for SNBC betting, and the same goes for the Sunday Night Football game between the Rams and Titans. This means the final sweat in the competition will likely come down to those 6 p.m. NBA games, which figure to end around 8:30 or 9 p.m. A million bucks on the line and it all comes down to … the point total in Jazz-Magic or a player prop in Pacers-Kings?
Strange and anticlimactic as that may be, Peabody thinks his namesake cutoff rule is the right move.
“It’s a great idea, and I think it makes the contest more exciting for people following along,” Peabody said. “Conceivably, you know what’s going on, you can see the leaderboard, you know what the scenarios are — it’s going to be a more interesting and fun sweat for people following along at home and watching. The media covering it can give live updates and know definitively what’s going on.
“And hopefully all the wagers from Saturday are graded by 1 pm on Sunday,” Peabody joked.
But not everybody is in favor of the Rufus Rule.
“My only complaint [with the 2021 format] is that betting ends at 1 p.m. on Sunday,” Spears said. “NFL is king, and Sunday betting should play a bigger role.”
One additional note: In-game betting and the “cashout” option are not available for the SNBC.
Teamwork doesn’t make this dream work
One point of concern brought up by Peabody is collusion. Even though it’s technically against the rules, it will be hard to police entrants working together, particularly with the great majority of the competitors expected to place their bets hundreds or even thousands of miles from Weehawken.
Peabody doesn’t think it’s likely to be a sizable issue, especially with so many games to choose from on Sunday and the 1 p.m. betting cutoff making it impossible for theoretical “teams” of entrants to bet early games, reassess, and then go all-in on both sides of a late game.
“I think collusion will only be a big issue if there’s a ton of overlay,” Peabody said. “If there’s no overlay, the benefit to colluding decreases immensely.”
In an extreme hypothetical, if 64 players joined forces and ponied up a total of $640,000 to enter the SBNC and were willing to bet both sides of games until they’d run 63 bankrolls to $0 with one bankroll left standing, they’d have to be totally certain of winning first place to make playing for the prize pool alone worthwhile. (Never mind the taxes on the winnings.)
Here’s how the guaranteed prize pool breaks down, with the top 25 finishers earning cash on top of whatever dollar amount is in their event bankroll:
*First place also wins a ticket to the DraftKings Tournament of Champions.
The payout amounts will increase as percentages of the total prize pool if there are 445 or more entries.
It’s notable that no other sports betting operator has tried to mimic DraftKings’ creation since the inaugural event in 2019 — but not surprising, given the controversy, lawsuits, and overlay that time around.
With COVID having disrupted plans for a 2020 SBNC, DraftKings has had plenty of time to tweak the rules and try to come up with the right formula. We’ll know by Sunday night if they’ve found it. If so, expect more DraftKings events like this, plus a few knockoff ventures from some of their competitors.