About a year ago, I introduced the Vegas Bargain Rating (VBR) metric to identify discrepancies between DraftKings PGA salaries and odds to win a tournament. Such a metric is valuable because DraftKings weights player odds so heavily in its pricing. Take a look at the correlation between salaries and odds for the Memorial Tournament:
The r-squared value of 0.73 is high and suggests that DraftKings prices players largely by their odds to win. That’s useful information because it’s not a perfect 1.0 correlation. There are outliers, and identifying those can help us find value in our quest to roster the winner of the tournament. And that’s useful because daily fantasy golf guaranteed prize pools (GPPs) are massive these days. If you want to take down a top-heavy GPP, you almost always have to roster the tournament’s winner. The VBR metric can help you find golfers who are cheap relative to their odds of winning.
To calculate VBR, I find a line of best fit (shown above), ‘predict’ what a player’s salary would be if there were perfect correlation, calculate the difference between predicted salary and real salary, and then reset everything to an easy-to-understand 0-to-100 scale.
And, of course, we can do the same exercise for golfers on FanDuel, where they have a lower r-squared value than they do on DraftKings, but FanDuel VBR is still useful:
Without further ado, here are the Memorial VBRs for both DraftKings and FanDuel:
The player who stands out the most, as usual, is world No. 1 Dustin Johnson, whose VBR dwarfs that of any other golfer. He has so much win equity on a week-to-week basis that it is almost impossible for DraftKings and FanDuel to price him properly. His ‘predicted salaries’ — using the lines of best fit — for DraftKings and FanDuel are almost unbelievable: If the field were properly priced according to odds to win, DJ would be $16,720 on DraftKings and $21,085. Those are unreal numbers and of course the sites couldn’t price him that way. That would leave an average of just $5,559 per golfer for the remaining seven spots on FanDuel. Rostering DJ should be restrictive, but it shouldn’t be that restrictive.
Thus, we have an edge on a weekly basis. The top guys — especially DJ, but also Jon Rahm, Jordan Spieth, and Jason Day — are all underpriced relative to their odds. Given that knowledge, does it make sense to use a stars-and-scrubs approach in your lineup construction?
I think so. Take a look at the line in either of the graphs above. The guys above the line (higher on the y axis) are underpriced relative to their odds, while the guys under the line are overpriced. So not only do you get a discount on the top guys; you also get a discount on the cheaper guys. Sure, they don’t have amazing odds to win — Byeong-Hun An has only a 1.8 percent implied probability of winning this week — but it’s not as if anyone outside of the studs has great odds either. Brooks Koepka, for example, is $2,800 more expensive on DraftKings and has just 3.2 percent implied odds of winning. Is that bump in salary worth it? According to VBR, it’s not: A player with his odds should be priced (relative to the field) at $8,792. Given the odds and prices of other players this week, Koepka is about $1,000 too expensive.
Of course, the same reason we can identify discrepancies — the r-squared value isn’t a perfect 1.0 — is also why this isn’t a perfect exercise. Sports carry a lot of variance, and odds to win isn’t the only factor that goes into pricing, so while the most optimal way to play daily fantasy golf — over a million contests and PGA tournaments, say — is to go stars-and-scrubs, on a weekly basis there will be noise, and we haven’t even talked about ownership, which should be taken into account (and can be reviewed after lineups lock via our DFS Ownership Dashboard).
That said, we’re always searching for a sharper process; understanding pricing inefficiencies is a step in that direction.
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Good luck this week!
