Scandals Plaguing Daily Fantasy Sports Sector
The last ten days have been a nightmare for the daily fantasy sports market. We are used to updating on the seemingly endless wave of new partnerships and sponsorship deals with the major players in this sector. Both DraftKings and FanDuel have become synonymous with just about every major sporting brand in the U.S. as they offer an alternative to illegal online gambling. The fact that they reward so called fantasy players with millions in real money prizes has got them under scrutiny from those who claim they are no different for regular gambling.
Last week saw the opening of one of the biggest scandals to hit the DFS sector when an employee of DraftKings Ethan Haskell admitted to “inadvertently” releasing crucial data prior to the start of the third week of NFL games. Coincidentally Haskell also managed to win $350,000 on rival site FanDuel in the same week.
Today saw a rare show of cooperation between the arch rivals DraftKings and FanDuel as both realize that the integrity of their industry is facing a real threat that could ultimately bring it down. Both companies released a statement in which they defended the integrity of their companies after the allegations of what amounts to insider trading surface.
Critics believe that the scandal surrounding Haskall raises the dilemma of how exactly DFS companies protect access to their sensitive data to their employees which according to experts like gambling lawyer Daniel Wallach “gives that person a distinct edge in a contest.” In their joint statement DraftKings and FanDuel said that “nothing is more important” than the “integrity of the games we offer.”
Under increasing pressure both companies banned their employees for participating in tournaments on each other’s sites as well as playing on their own company site. The statement went on to say,” Both companies have strong policies in place to ensure that employees do not misuse any information at their disposal and strictly limit access to company data to only those employees who require it to do their jobs. Employees with access to this data are rigorously monitored by internal fraud control teams, and we have no evidence that anyone has misused it.”
There is no doubt that the timing of this latest scandal could not be worse as there is already calls by certain legislators to review the current legal loophole that DFS companies operate under.