Fantasy Sports Industry Under Scrutiny After Insider Trading Allegations

FanDuel was the originator or “first to market” for daily fantasy sports in 2009 and they’ve been sitting at the top (with draftkings) for a while.

He’s watched the industry grow, with FanDuel and DraftKings netting hundreds of millions in investment to recruit new players. FanDuel, DraftKings, and StarsDraft do not provide services to those five states.

Two class action lawsuits have been filed against DraftKings and FanDuel, centered around the fact that the sites – up until last week – allowed their employees to enter contests in each other’s pools and that employees had access to inside information that allegedly could have helped them win money.

Fanduel vs DraftKings – What Sports are Offered.. The most generous of the second-tier websites was FantasyDraft, which paid out an excess of about $137,000 in GPP money.

Insider trading or not, it smells like it to the public and their representatives. In Haskell’s case, he is an avowed “grinder”-that’s industry-speak for the obsessives who do research, make spreadsheets, and win by expertise”.

And what you’re left with is people like Johnson who feel cheated and want retribution.

“Fantasy is real gambling”. “It is a game of skill”, he said.

Is this suit the start of the end for daily fantasy leagues?

“It’s impossible to convince me that it’s not gambling”, Bowlsby told the Associated Press.

Executives for both companies, which are closely held and valued at more than $1 billion each, have said they are not yet turning an overall profit. From the amount of money both companies are spending on advertising and paying out on an annual basis, it is safe to assuming revenues are quite significant.

DraftKings and FanDuel have both enlisted third-party law firms to act in an advisory role, and FanDuel is reportedly working with Washington lobbyists. Remember that FanDuel is 0.5 PPR, so pass-catching running backs may be more popular on full-PPR sites.

We may hate seeing DraftKings plastered on everything except the forehead of the guy anchoring SportsCenter (I probably shouldn’t give ESPN any ideas), but the ad blitz worked. Last year, its ads ran just 8,743 times.

DraftKings GPPs attracted 4.14 million entries for October. 11, compared to 3.75 million the previous week. Also, we’re a quarter of the way through the National Football League season.

In his private practice, Massella says he has recently noticed a 10-15 percent increase of those who suffer from issues related to daily fantasy sports, like anxiety and financial problems. These companies and their product have skyrocketed in popularity the past couple of years much like online poker gambling in the early 2000s. But without any form of independent regularity agency, adequately enforcing this will be very hard.

But the law exempted fantasy sports, which was officially deemed to be a game of skill rather than chance. “We are aware of the New York attorney general’s investigation and are actively monitoring the situation”, said Giants spokesman Pat Hanlon. Major League Baseball has an interest in DraftKings, and NFL teams and other leagues all have relationships with the two industry leaders.

Yet the way things are being privately operated, it’s up to users of the websites to take their word for it.