Fantasy sports companies have agreed to a self-regulatory board to ensure ethical behaviors, after several companies went under a federal criminal probe by state regulators, reports Bloomberg News’ Scott Soshnick.
Seth Harris, who previously served as an official for President Barack Obama’s administration, will serve as the board’s chair.
“The issues and opportunities facing the fantasy sports industry can be best addressed through an independent agency supported by the industry and its members,” Harris said in a statement. “The Fantasy Sports Trade Association will continue to work closely with state and federal lawmakers and regulators as we develop and implement strong integrity programs. We are confident that an independent control agency can prevent any unethical, dishonest, or unfair behavior. In the process, we can save lawmakers and regulators the cost and effort of intervening so that they can expend their limited resources on bigger and more societally important challenges.”
Fan Duel Inc. and Draft Kings Inc. are being investigated for their business models, and whether or not their daily fantasy sports betting is considered legal. The Department of Justice is also looking into whether or not fantasy sports employees used insider knowledge of customer bets to give their own wagers unfair advantages.
DraftKings employee Ethan Haskell admitted to leaking information about the site’s fantasy lineups during the NFL’s Week 3. The data Haskell released is made public after lineups have been finalized, but can give participants an advantage if obtained ahead of time. That week, Haskell won $350,000 on rival site FanDuel from a $25 entry.
SI's Michael McCann reports Haskell’s alleged “insider trading,” coupled with increased attention paid to DFS in light of DraftKings and FanDuel’ relentless advertising campaigns, has spawned an expanded FBI probe into DFS, a criminal investigation by the U.S. Attorney for the Middle District of Florida, more than two dozen lawsuits filed against DraftKings and FanDuel, and several states reclassifying or contemplating reclassification of DFS as gambling.
- Christopher Chavez