Scandal Hits the Fantasy Sports World

DraftKings employee leaks data, rakes in the bucks
By Neal Colgrass,  Newser Staff
Posted Oct 5, 2015 8:30 PM CDT
Scandal Hits the Fantasy Sports World
In this Sept. 9, 2015, photo, a marketing manager for content at DraftKings, a daily fantasy sports company, works at his station at the company's offices in Boston.   (AP Photo/Stephan Savoia)

Two big fantasy sports companies are in damage-control mode after an employee leaked vital data and won big bucks in the same week—stirring fears of corruption in a multibillion-dollar industry, the New York Times reports. Ethan Haskell, who works at DraftKings, admits he mistakenly released information about player lineups that could be used to gain the upper hand in fantasy sports games. He then managed to win $350,000 playing at the site FanDuel. Many employees at such companies also play the games, so if they have crucial data ahead of time, well, you get the idea. "The scary thing is that nothing appears to be in place to stop any employee from obtaining data that is not available to the [everyday] player," writes Ben Brown at DFS Report. "That is what has to change." (Brown also broke the story at DFS Report.)

Now industry analysts and lawmakers are talking about regulating fantasy sports. "If the industry is unwilling to undertake these reforms voluntarily, it will be imposed on them involuntarily," says a sports and gambling lawyer. The companies are allowed to operate under a 2006 federal law that bans online gambling but considers fantasy games contests of skill rather than chance. Yet "if they had to justify themselves at a hearing they wouldn't be able to," says Rep. Frank Pallone Jr. of New Jersey. DraftKings and FanDuel, which told workers to stop playing games for now, say that "nothing is more important ... than the integrity of the games." There's no evidence of abuse, they add, but they still "plan to work with the entire fantasy sports industry on this specific issue." (See a breakdown of the facts at Legal Sports Report.)

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