Controversy spurs reviews
FanDuel, DraftKings take steps following $350,000 payout.
Daily fantasy sports operator FanDuel said Wednesday it will permanently ban all
employees from playing any daily fantasy sports for money and begin an internal probe following reports a DraftKings
employee may have had access to unfairly valuable data before winning $350,000 in a FanDuel contest.
FanDuel said in a release there’s no evidence showing the contest was compromised or that non-public information was used to gain an unfair advantage. But the New York-based company said it doesn’t want to rely only on what it knows right now and wants to rebuild trust with players.
FanDuel said it hired former U.S. Attorney General Michael Mukasey to evaluate its internal controls. It is also creating an advisory board led by Michael Garcia, a lawyer who led the investigation into the 2018 and 2022 World Cup bid process, then resigned from the FIFA ethics committee in protest over the handling of his findings.
The company’s announcement comes after New York’s attorney general sent letters to DraftKings and FanDuel on Tuesday, demanding they turn over details of any investigations into their employees.
While legal in most U.S. states, daily fantasy sports is unregulated, unlike casinos and lotteries. The incident has been likened to insider trading. The internal data, describing how often players are selected by all players in the salary-cap style game, could be used strategically to build a lineup of players with a lot of potential who aren’t popular selections among opponents.
DraftKings CEO Jason Robins said in an interview with cable network Fox Business that the employee received the information after his lineup locked on FanDuel, so there was no way he could have used it to gain an advantage. Robins said the company is open to talking about transparency and has also hired an attorney for an internal investigation.