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DraftKings, the NFL, and a Fantasy Football Scandal?

By John Hipskind on October 8, 2015

Fantasy Sports is a multibillion-dollar industry and has become as common place as having an office March Madness pool.  There is even a comedy television show, The League, based around a group of friends’ fantasy football league.  But revelations about a couple of the big industry players in pay-to-play Fantasy Sports, specifically DraftKings and FanDuel, have begun raising questions about whether some may have an unfair advantage by having access to information that is unavailable to the public-at-large.

For example, employees of these companies are able to access information regarding which NFL players are being used and bet on by the majority of the company’s users.  This information would, potentially, allow these employees to be able to compile this information and use it for their own benefit/advantage against other Fantasy Sports users.  This means there is the possibility that some of the employees for these companies could be using this information, information that is provided by the people paying these companies to play Fantasy Sports, against those same people in order to win money.

That scenario appears to be exactly what is happening.  Last week, a DraftKings employee posted ownership data compiled from various players on a Fantasy Sports forum.  The employee removed the information and claimed the post was in error.  He also was quick to point out that although he has access to this data, he is not allowed to play on DraftKings and, thus, he would not be able to use this data to gain an unfair advantage.  However, although he is not allowed to play on DraftKings, there is nothing preventing him from competing on other Fantasy Sports sites.

Later that week, it was discovered that this same employee had placed second in FanDuel’s NFL Sunday Millions contest and won $350,000.  The New York Times has reported that this employee had access to the ownership data he inadvertently posted online prior to setting his lineup in FanDuel, giving him an unfair advantage over the other paying players in FanDuel’s contest.

This type of behavior should be particularly troubling to anyone who has paid money to play at FanDuel, DraftKings, or any other pay-to-play Fantasy Sports site as information they provide to these sites could be actively used against them when they play.  These issues become even more worrisome when one learns that Jerry Jones, owner of the Dallas Cowboys, and Robert Kraft, owner of the New England Patriots, both have stakes in DraftKings, and that ESPN has a significant sponsorship deal with DraftKings.

As the investigation into these issues continues, we encourage anyone who has played in either FanDuel or DraftKings to contact us at: 618-641-9189 (IL) | 314-312-2930 (MO) | info@hm-attorneys.com.

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