Competitive environments in fantasy sports gaming: Effects of entry fees and rewards on opposition quality and league sorting

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.

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