DraftKings employee Ethan Haskell and Warren Buffett have something in common: They show a keen eye for spotting value where others don't.
Haskell, who generated controversy recently after winning a $350,000 jackpot at fantasy sports rival FanDuel, appears to have taken a page from the celebrated investor's playbook to gain an edge in the contest. A statistical analysis of Haskell's team roster provided to CBS MoneyWatch suggests that his strategy involved not picking star players, as is more typical in fantasy sports, but rather identifying undervalued players with long-term upside.
Put another way, Haskell may simply be a "value" investor who was able to ride his contrarian instincts to big bucks, allowing other fantasy contestants to follow the herd in making their team selections. That means he may not be a cheat, as some have alleged, but rather someone skilled at finding diamonds in the athletic rough.
A review of Haskell's player picks by DataScience, a firm that advises businesses on how to harness so-called big data techniques to boost their performance, certainly suggests that he wasn't afraid to take risks. His quarterback, Andy Dalton of the Cincinnati Bengals, struggled in the pre-season but has since led his team to an undefeated record. Other Haskell picks were Bengals wide receiver A.J. Green, and Allen Hurns of the Jacksonville Jaguars, both of whom have suffered injuries this year that likely disguised their true value.
DataScience, which examined Haskell's selections using public information, concludes that some of the picks featured "a particularly powerful blend of rarity and high scoring." Rarity in statistics indicates a deviation from what is considered average. It's worth noting that DataScience hasn't checked how much these attributes contributed to Haskell's victory, nor does it have any inside information about how Haskell went about choosing his picks.
Still, chance alone doesn't explain his success, according to experts consulted by CBS MoneyWatch.
One way Haskell might have gained an edge is by using an algorithm that examined changes in fantasy contestants' rosters. Such an analysis would be helpful in identifying players with the biggest potential upside.
In daily fantasy sports, as in the stock market, the most widely chosen assets -- or, in this case, athletes -- represent a less attractive investment because the rewards of the performance are shared among many holders. By contrast, the solitary owner of an undervalued asset would reap larger rewards than those who have opted for a more obvious choice.
For Haskell, that could've entailed using data from DraftKings to help him determine which players were "owned" by the most competitors on FanDuel, said Michael Lopez, an assistant professor of mathematics at Skidmore University, tells CBS MoneyWatch.
"If you select Allen Hurns and only 1 percent of the country selected Allen Hurns [and] he has a big day, and somebody else who was selected by 20 percent of the people doesn't have a big day, you have a leg up on 90 percent of the people," he said, in an interview with CBS MoneyWatch.
Ryan Lamchick, a Miami-based attorney who is considering filing suit against DraftKing and FanDuel, theorized that such an algorithm would have enabled a player like Haskell to "be a contrarian and to bet on players that everybody else is not betting on."
Haskell's prowess at fantasy football has come under scrutiny after the New York Times uncovered his money-winning wager on FanDuel. Both DraftKings and FanDuel have subsequently barred their employees from betting on fantasy sports for money.
Haskell is a Web content manager for DraftKings, according to his profile on LinkedIn, a job he has held since June 2014. He graduated with a bachelor's degree in business and managerial economics from Allegheny College and describes himself as a Boston sports fan.
The companies, which deny that Haskell benefited from insider information in making roster moves, have launched separate internal investigations into their business practices. Attorneys general in New York and Massachusetts also have initiated separate probes of the daily fantasy industry in wake of the controversy. U.S. Rep Frank Pallone, D-New Jersey, has called on Congress to launch its own probe.
According to statisticians and sports economists familiar with daily fantasy sports, creating an algorithm to gain an edge in picking players wouldn't have required any special technical prowess. And notably, it is not clear that such as model for competing at fantasy sports would violate any law.
"Either the company or authorities may change the rules so that this can't happen again," said Victor Matheson, a sports economist at the College of the Holy Cross.
Editor's note: CBS has an investment in FanDuel of less than 1 percent of that company's value.