FanDuel bans employees from playing for money

NEW YORK — 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 investigation 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 is no evidence showing the contest was compromised or that non-public information was used to gain an unfair advantage. But the New Yorkbased company said it doesn’t want to rely only on what it knows right now and wants to rebuild trust with its 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.

New York Attorney General Eric Schneiderman wants the companies to explain their policies or practices prohibiting employees from playing. Daily fantasy sports participants put together virtual teams based on real players and compete for points based on the players’ statistics. Paid contests vary widely in scope and cost, costing as little as $1 to enter but with some players wagering tens of thousands of dollars each matchup.

In the letters, Schneiderman asked for the names, job titles and descriptions of employees who compile and aggregate data including pricing algorithms and athletes’ ownership percentages for past contests.