DraftKings bans employees from betting on fantasy games

Yesterday New York Attorney General Eric Schneiderman announced that a state investigation would be launched into the allegations of data violations by DraftKings and FanDuel employees.

But fantasy football fan Kirpas says, many players called foul, after hearing reports that employees at fantasy sports firms FanDuel and DraftKings allegedly used inside information to rig their bets and win hundreds of thousands of dollars.

“Employees at DraftKings and FanDuel might be benefiting in a way that hurts other daily fantasy sports players by having inside information”, he said.

The uproar came after this New York Times article, bringing to light a DraftKings employee who inadvertently released data early and, in the same week, won $350,000 in a FanDuel contest.

We have asked former federal judge and United States Attorney General Michael Mukasey to review the facts and evaluate our internal controls, standards and practices.

Just because a lawsuit was filed, of course, doesn’t mean that either DraftKings or FanDuel did anything legally wrong. Both companies deny wrongdoing.

In this September 9, 2015, photo, an employee in the software development department of DraftKings, a daily fantasy sports company, walks past screens displaying the company’s online system stats in Boston.

Analysts are saying this is akin to “insider trading” as an employee from one site would have insider access to what players from other competitors are choosing and then that employee could place a bet on a rival website, selecting players being generally ignored and increasing the chances of winning.

The National Hockey League, which doesn’t run a daily fantasy site itself but is an investor in DraftKings as well as an exclusive partner, said Friday that employees are banned from playing this season, which started Wednesday. Ole Miss athletic director Ross Bjork said the avalanche of daily fantasy sports advertising has quickly turned the topic into a pressing issue.

This news comes on the heels of related stories concerning the fantasy sports space.

The first-but surely not last-aggrieved customer is Adam Johnson, a daily fantasy player who lives in Kentucky. Both companies said that no information has been found to indicate that any employee had access to information specifically giving them an unfair advantage in a contest.

As a debate intensifies about whether the loosely regulated industry should be considered gambling, the ads are creating an uncomfortable association for the NCAA, which has strict rules for its players on sports wagering. You have Time Warner, NBC and Comcast.