The New York attorney general opened an inquiry Tuesday into whether employees from daily fantasy sites DraftKings and Fanduel won money using insider information, reports The New York Times.
The Times reports the attorney general is asking the two companies for internal data on how they prevent employees from committing fraud.
Earlier Tuesday DraftKings and FanDuel temporarily banned their employees from participating in betting on fantasy sports amid allegations that they have been to win large jackpots. Monday, the Times reported DraftKings employee Ethan Haskell admitted to leaking information about the players most frequently used in fantasy lineups on the site during the NFL’s Week 3. The data Haskell released is made public by the site after lineups have been finalized but can give players an advantage if obtained ahead of time. That week, Haskell won $350,000 on Fanduel.
New York Attorney General Eric T. Schneiderman is asking for the names and job titles of employees who oversee data that could be used to gain an advantage, such as ownership percentages of players and pricing algorithms.
Daily fantasy sites have mostly avoided the eyes of legislators because of their designation of games of skill as opposed to chance. The two companies have business relationships with ESPN, the NFL, NFL owners Jerry Jones and Robert Kraft and MLB.
- Rohan Nadkarni