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Fantasy explosion has some giving up day jobs

Saturday - 8/23/2014, 6:00pm  ET

In this photo taken on Tuesday, Aug. 12, 2014, fantasy sports enthusiast Cory Albertson poses for photos at New York's High Line Park. (AP Photo/Richard Drew)

TIM DAHLBERG
AP Sports Writer

Cory Albertson was cruising at 30,000 feet and, like others on the plane to Detroit, taking care of some business on his laptop.

His spreadsheets contained names familiar to anyone who follows baseball. Pitchers, catchers, maybe a center fielder Albertson thought might be due for a home run or two.

Albertson's business on this day was trying to outsmart a few guys in one game, maybe a few thousand in another. Crunching numbers to enter some 500 fantasy sports contests before the first pitch of the day, he was hoping for a score before the night was out.

"I didn't look exactly, but I think I had about $22,000 invested for the day," he said.

It was just another day in baseball for Albertson and his partner, Ray Coburn. Football will be another story, with more than $100,000 of their bankroll in play on any given Sunday this fall.

Million dollar paydays. Big wins. Vegas junkets. Those are just some of the prizes offered online, where a hybrid of the traditional season-long fantasy leagues played by an estimated 41 million Americans has morphed into something quite different.

It's daily fantasy sports and it's legal in most states, thanks to an exemption the major sports leagues carved out under the Unlawful Internet Gambling Enforcement Act of 2006. The same legislation that outlawed online poker as a game of chance allows fantasy players to do what regular sports bettors outside of Nevada only dream about -- wager money online.

It may resemble sports betting, but those who run it -- and those who play it -- say it's not. They cite the gambling law that labels fantasy sports as a game of skill, where picking players to fill a team depends a lot less on sheer luck than picking a team to win a game against the Vegas spread.

Daily or weekly cash games are just a fraction of the fantasy sports universe. The Fantasy Sports Trade Association says Americans spent $11 billion playing fantasy football alone in 2013. But the short-term cash games are exploding in popularity, and anyone over 18 with a credit card, a Paypal account and online access can play. Team headquarters on any given day can be in an airplane, an office, or even your basement.

There are also tens of thousands of losers, of course. The numbers dictate that more than half the players have to lose if the others are to win.

One company -- the leading site FanDuel -- has some $6 million a week up for grabs now and expects to triple its base to some 500,000 customers this NFL season. Dozens of other companies have sprouted up offering everything from daily play to help -- for a fee -- on selecting the right mix of players.

The profits are so easy -- daily fantasy sites take about 10 percent off the top of every contest as their fee -- that Comcast Ventures, the venture capital affiliate of giant Comcast Corporation, invested $11 million in FanDuel last year to get a piece of the action. Even mainstream media landmark Sports Illustrated is offering daily fantasy cash games of its own.

"Two years ago investors would have been very skeptical, even nervous, about daily fantasy sports," said Nigel Eccles, the co-founder and CEO of FanDuel. "Today they see this as very good for sports. Our players consume 40 percent more sports than regular fantasy sports players. They spend an average of 24 hours a week watching, searching and doing research on sports."

Albertson is so good at it that he has hedge funds and option trading desks talking to him about wanting to invest in his system. The former professional poker player was looking for something to keep his interest after online poker was effectively banned by the 2006 act. He found it just in time for the NFL season in 2011, investing $500 to start and adding a few hundred here and there as the losses started to mount.

But he came up with some basic rules, such as don't draft a quarterback and a field goal kicker from the same team because they're competing for the same scores. Later, he and Coburn developed an algorithm to maximize their chances while playing numerous games.

Albertson spends several hours a day studying players. During the NFL season, he and Coburn will work from Saturday afternoon until kickoff the next day on lineups for some 1,000 different contests.

"I knew it was a matter of time before I had a breakthrough week and was on the right side of the luck factor," Albertson said. "I stayed with it that season and ended up with like $8,000 or something. I felt the model had sort of proven itself and most likely I was demonstrating I had a skill edge in these games."

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