Last month, Rep. Frank Pallone Jr. (D-NJ) called for congressional hearings in regards to the emerging fantasy sports industry, describing the legal landscape surrounding daily fantasy sites as “murky at best.” And thanks to a developing scandal, an investigation could be on its way.
According to the New York Times, a mid-level DraftKings content manager named Ethan Haskell prematurely released data showing which NFL players were most popular on fantasy teams for week three of the NFL season. Normally, this information is not released until the games have started and lineups have been locked in. This mistake might not have raised concerns, if not for the fact that Haskell also won $350,000 placing bets on FanDuel, a DraftKings competitor, that very same week.
“It is absolutely akin to insider trading,” Daniel Wallach, a sports and gambling lawyer, told the New York Times. “It gives that person a distinct edge in a contest.”
DraftKings and FanDuel issued a joint statement regarding the incident and denied any wrongdoing. A DraftKings spokesperson also defended Haskell, saying it was impossible for him to have used insider information for his own benefit, although the site offered no specific explanation as to why this was the case.
“Both companies have strong policies in place to ensure that employees do not misuse any information at their disposal and strictly limit access to company data to only those employees who require it to do their jobs,” the companies said in the statement. “Employees with access to this data are rigorously monitored by internal fraud control teams, and we have no evidence that anyone has misused it.”
The Chicago Sun-Times is reporting that both DraftKings and FanDuel have now banned their employees from participating in fantasy sports on rival sites.
(Source: The New York Times)