Early forms of fantasy baseball were sometimes called "tabletop baseball". One of the best-known was Strat-o-Matic, which published a game containing customized baseball cards of Major League Baseball players with their stats from recent seasons. Participants could then re-create previous seasons using the game rules and the statistics, or compose fantasy teams from the cards and play against each other.
The landmark development in fantasy baseball came with the development of Rotisserie League Baseball in 1980. Magazine writer/editor Daniel Okrent is credited with inventing it, the name coming from the restaurant where the game was invented. The game's innovation was that "owners" in a rotisserie league would draft teams from the list of active Major League Baseball players and would follow their statistics during the ongoing season to compile their scores. In other words, rather than using statistics for seasons whose outcomes were already known, the owners would have to make similar predictions about players' playing time, health, and expected performance that real baseball managers must make.
Rotisserie league baseball proved to be hugely popular, even in the 1980s when full statistics and accurate reporting was often hard to come by. The traditional statistics used in early rotisserie leagues were often chosen because they were easy to compile from newspaper box scores and then from weekly information published in USA Today. The use of statistics like pitchers' winss and RBI are often scoffed at today by fans of a sabermetric bent.
The advent of powerful computers and the Internet revolutionized fantasy baseball, allowing scoring to be done entirely by computer, and allowing leagues to develop their own scoring system, often based on less popular statistics. In this way, fantasy baseball has become a sort of in-time simulation of baseball, and allowed many fans to develop a more sophisticated understanding of how the real-world game works.
Rotisserie leagues and their descendants typically draft teams before the season begins (or very shortly thereafter). One approach is to hold an auction, whereby each owner has a fixed amount of money to bid for players, and he must fill his team's roster within his budget. Another approach is to perform a round-robin draft of available players until all teams are filled.
Some leagues allow teams to keep some players from one year to the next, allowing savvy owners to build fantasy dynasties.
Many leagues allow teams to trade with each other during the season, as well as to replace players who get hurt or stop performing well with players from the pool of those who are not presently owned. However, some leagues prohibit such in-season "free agent" replacements, feeling that the game is more interesting when teams must live and die by the quality of their draft.
Many fantasy leagues are played for money. Owners ante up an entry fee at the beginning of the season, and may also be charged for in-season activity such as trades and "free agent" acquisitions. The pool of money collected is then distributed to the winner(s) at the end of the season.