New York AG launches investigation into fantasy sports web site

That same employee, who works for Draft Kings, won $350,000 on FanDuel last week. The “nongambling” enterprise of daily fantasy sports leagues is enmeshed in its first scandal, and it is a beauty. Sider has been playing since his college days, before fantasy football exploded on the internet.

The Times quotes analyst Eilers Research, which estimates that the daily fantasy sports firms will generate $2.6 billion in entry fees in 2015 and climb to over $14 billion in 2020. The result of his misconduct led him to winning $350,000 through FanDuel that same week.

Schneiderman wrote a letter to both companies Tuesday, demanding the name, job titles, and descriptions of any employees responsible for compiling the wide range of data used to determine the value of players, The Times reports.

He also asked for copies of each site’s employee handbook, data usage policy and “any policies or procedures concerning the proper use of company data and any formal policies or procedures concerning employee participation in fantasy sports”. They had already prohibited employees from participating in daily fantasy contests on their own sites, but the new bans will stretch to competitor sites as well. That’s where people create virtual teams of actual pro sports players, and try to outscore other people’s virtual teams. ESPN will continue to air ads for FanDuel and DraftKings, but the network will no longer run individual segments sponsored by them.

On Monday the companies said in a joint statement that they had temporarily banned employees from playing daily fantasy sports until they come up with a more detailed policy on the issue. The letter also asks for an explanation of where the data is held and how it is safe guarded from being exploited by employees.

He said the company is open to talking about transparency and has also hired an attorney for an internal investigation. Players put together a fantasy team with real athletes, and make money depending on how their players do on game day.

The companies say they restrict employee access to competitive data for play on other sites, and there is no evidence that any employee or company has violated these rules.

Those days when DraftKings and FanDuel operated in an unregulated bubble are quickly coming to an end. “Trust with our players is core to our business and has always been our primary concern so we take any potential game integrity issue very seriously”, FanDuel’s statement read. Critics such as Pallone contend that the sites allow for gambling, rather than the games of skill that are exempt from a 2006 law that blocks many forms of online betting.