If you’re a sports fan, you’re likely familiar with daily fantasy sports(DFS) sites like DraftKingsand FanDuel, which have run plenty of ads for their contests.
But all of that media attention has led some lawmakers to call for hearings to debate the legal status of the industry. Now, an incident involving employee access to inside information has turned into a hubbub the likes of which DFS operators have not yet seen and has added urgency to the calls for the industry to be formally regulated.
The problem began when Ethan Haskell, a mid-level content writer for DraftKings, published a list of football players along with the percent of users who had decided to draft them in their lineups. After games in a slate have concluded, the site regularly posts a breakdown of the contests and includes these percentages. The issue, however, was that Haskell posted them before the games had begun, leading some to believe that DraftKings employees might be able to access inside information for use at other DFS sites.
His employer’s policy was that employees were not allowed to play at DraftKings, but could play on a competitor’s site if they pleased. As it turns out, Haskell won $350,000 in a contest on rival site FanDuel that same week. Haskell has maintained he did not have access to player percentages before lineups were locked in, so there was no way he could use such information on other sites.
The story then spiraled out of control and was reported by the New York Times, Forbes, and many other mainstream publications. Nevada Senator Harry Reid (pictured) was among the lawmakers to call for the industry to be investigated.
“They even advertise on TV about the multi-million dollar wins that people can get and have had,” said the former Senate Majority Leader on NorthJersey.com. “And we learned yesterday in a nice piece written in the New York Times and other places that [there] is absolute scandalous conduct taking place at those programs, fantasy sports. Some of the owners of those programs know what’s going on in their competitors’ [contests] and so they can make a lot of money, and that’s what they’ve done.”
Reid, a former Nevada gaming commissioner, used to be a big proponent of bringing online poker to the Silver State. But with iPoker sites now up and running, Reid has seemingly changed his position on the issue.
The Senator is now a supporter of Sheldon Adelson‘s (pictured) Restoration of America’s Wire Act, which aims to ban all online gambling in the US, including in the three states where it’s already regulated.
“I think the proliferation of gambling on the internet is not good for our country,” he said in an interview last year.”I think it is an invitation to crime. I think it is hard to control for crime when you’ve got brick-and-mortar places, let alone something up in the sky someplace, and it is very bad for children.”
He reiterated that stance in response to the daily fantasy controversy. “So the answer is yes [to Congressional scrutiny]and I think it also should be a warning shot to everybody that online gaming is a real scary thing and we’d better look at all of it.”