A 'referral program' is a system in which a player receives rewards for referring first-time players to a site or league. A referral program is used for many things outside of fantasy football, like in subscription-based platforms. Often websites will ask how you heard of a particular website or program. Identifying someone may entitle them or you to rewards. In fantasy football, this may include bonus money to spend in league or special titles on the website.
Some contests and leagues require an entry fee. From this entry fee, the website hosting the contests and leagues often take a portion of the entry fee, called the 'rake' mentioned in a previous tutorial. In a league or contest that uses a rakeback program, a portion of the rake is returned to the player for playing in the league or contest.
It's quite simple; the fantasy site offers rewards in return for new players. It asks its current members to get their friends to join, and in return they give out various perks.
Referral programs are actually pretty beneficial to a new fantasy football player. It offers you a chance to get a free buy in, to learn the ropes without any pressure of losing money. It might even straight up pay you money, which is a win in anyone's book! Referral programs are designed to bring more players in and the tactics that are used are enticing its players with worthwhile rewards.
Fantasy websites offer referral programs in order to increase the amount of traffic they have on their site. By offering rewards for getting a friend to join, more players are playing in each fantasy competition. The thought is that the more players playing, the better the experience is for everyone. With more players, the prize money is increased and payouts are even more desirable.