If you’ve watched any football or read any coverage of football this season, you’ve seen plenty of ads for daily fantasy, including right here on PFT and in the sponsorship of PFT Live. NBC Sports has an equity stake in FanDuel, which along with DraftKings has quickly become a ubiquitous part of the football-watching experience.
And now there’s a controversy brewing about the access to inside information within the company, and some in Congress are calling for tighter regulations of the huge daily fantasy business.
Both companies have acknowledged that a DraftKings employee won $350,000 at FanDuel. That raised big questions about whether people with access to detailed information about how daily fantasy players are making picks are using that information to win: If you’re competing with people who have access to more information than you, how are you supposed to beat them? It’s a question that gets to the fundamental fairness of daily fantasy.
Even though DraftKings says the employee who won big at FanDuel won on his own skill and didn’t have any access to any inside information until after all FanDuel lineups were locked, FanDuel and DraftKings have responded to the questions by temporarily banning their employees from playing daily fantasy. Both companies released a statement insisting that the integrity of their games is paramount.
“While there has been recent attention on industry employees playing on FanDuel and DraftKings, nothing is more important to DraftKings and FanDuel than the integrity of the games we offer to our customers,” the statement says. “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. However, we continue to review our internal controls to ensure they are as strong as they can be. We also plan to work with the entire fantasy sports industry on this specific issue so that fans everywhere can continue to enjoy and trust the games they love.”
That might not be enough to placate critics of daily fantasy. Members of Congress have called for hearings on daily fantasy and are asking for an explanation of how daily fantasy differs from gambling. Even if the games are scrupulously fair, some believe they should be banned under existing gambling laws. If Congress believes the games are rigged to benefit FanDuel and DraftKings employees at the expense of ordinary players, you can bet that the federal government will come down hard on the daily fantasy industry.
