The FBI and Justice Department are digging into the scandal that's erupted in the fantasy sports world, and they've begun talking to customers, reports New York Times. "It is entirely predictable that the government would follow up on the misleading reports about our industry," says a rep for DraftKings, whose employee last week admitted accidentally releasing information about NFL player lineups early and then winning $350,000 on rival site FanDuel. However, players interviewed by the FBI tell the Times that agents aren't just interested in whether such sites might be trafficking in what amounts to inside information: They're also investigating whether DraftKings accepted or even encouraged bets from states and countries where the contests are banned. On a public forum, A DraftKings exec may have told players how to make bets from places where the games aren't allowed.
A man who's filed a class-action lawsuit—one of three alleging DraftKings or FanDuel committed fraud—says he submitted money even though the operation of daily fantasy sports sites is banned in his home state of Louisiana. "We have no knowledge of the specifics of any federal investigation but strongly disagree with any notion that our company has engaged in any illegal activities," DraftKings says. An exec adds the company will comply with any new regulations should they come, per the Boston Globe. New York's attorney general has given DraftKings and FanDuel until Thursday to submit internal data, including player records, "algorithms that determine the fantasy pricing for athletes, and details on their policies to prevent fraud," reports the Wall Street Journal. The newspaper adds that investigators are trying to determine whether these sites qualify as gambling and thus should lose protections they currently enjoy as "games of chance." (Read more fantasy sports stories.)