Georgia lottery officials question legality of fantasy sports companies

Several states are examining the fantasy sports companies after it was revealed that employees often played on competing sites, prompting customer fears that they could gain an advantage from insider information. This will put a hamper on the earnings of startups in this space like DraftKings and FanDuel (which both also run esports matches) in addition to Vulcun. Robins said the players attracted to Boston-based DraftKings were predominantly millennial men ages 21 to 35 who are analytical and favor data and research.

The suit is just the latest legal action filed against the two daily fantasy sports sites that business analysts value at about $1 billion a piece. In response, the two largest daily fantasy sports operators, DraftKings and FanDuel, issued statements that they are, at least temporarily, suspending operation in Nevada.

The Wall Street Journal has previously reported that the Justice Department was investigating the industry, but the central role of Mr. Bharara’s office wasn’t previously known.

Daily fantasy sports sites saw reduced participation in their marquee National Football League contests this weekend, suggesting the relentless march of negative publicity is beginning to take its toll. He’s been working out of the Albany Bureau since 2011, covering Gov. Andrew Cuomo’s administration and the state Legislature.

New York Attorney General Eric T. Schneiderman informed FanDuel and DraftKings earlier this month that he was launching an inquiry into the companies, per Joe Drape and Jacqueline Williams of the New York Times. Will more states make the decision to count this as gambling? Participants select “teams” from real-life pro players, then win or lose based on the statistics compiled by those players.

It is quite clear that state regulators consider daily fantasy a form of gambling and hence any company willing to provide it must be licensed.

“Those comments were taken out of context and in any event are far less relevant than the facts about the way our business operates today”, DraftKings’ statement said.

While much of the scrutiny around daily fantasy sports has focused on fairness, there are increasing signs that the industry’s underlying legality is being questioned as well. But fantasy sports advocates labor to differentiate their games from gambling.

Nevada’s Gaming Control Board ruled that the fantasy sites aren’t illegal, but they are gambling. A state House bill scheduled for debate on Wednesday would limit fantasy sports activities to websites affiliated with one or more of the state’s 12 casinos. Daily fantasy sports are an accelerated version of the more-traditional season-long leagues.