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Daily fantasy sports under scrutiny in Texas and Washington
DraftKings, FanDuel and all other daily fantasy sports websites can't catch a break. In Washington, their fate depends on which bill state legislators decide to pass. Rep. Chris Hurst's House bill wants to reinforce the state's existing law and officially declare the services as illegal gambling. The Senate bill proposed by Sen. Doug Ericksen, on the other hand, wants to recognize them as games of skill and make them legal. Finally, Sen. Pam Roach wants to legally allow season-long fantasy leagues to operate. But each league will be limited to 50 people and the maximum fee they can collect per person who wants to play is $50. Any bill that becomes a law will take effect by July 1st.
DraftKings and FanDuel will remain open in NY during appeal
Daily fantasy sites DraftKings and FanDuel are free to continue operating in the state of New York. After a judge banned the gaming services from taking funds for a few hours last month, an appeals court ruled that the two companies could continue games in the state until an appellate panel reviewed the case. According to ESPN's Darren Rovell, the panel has done so, and it decided that the sites could stay open during the appeals process. The decision follows an amended lawsuit by New York attorney general Eric Schneiderman asking for the companies to not only return profits made in the state, but refund lost money and pay a $5,000 fine per customer. Refunding the entry fees alone could cost the sites up to $200 million.
NY calls for FanDuel and DraftKings to give back profits
It was a pretty glum New Year celebration for daily fantasy sites FanDuel and DraftKings, following an amended lawsuit filed against them yesterday by New York attorney general Eric Schneiderman. The two biggest fantasy sports sites have been facing legal trouble for some time now, but this latest suit has the potential to be the most damaging. It asks for FanDuel and DraftKings to return all of their profits made in New York, repay customers who lost money and pay up to $5,000 in fines to every customer. As ESPN reports, the two companies have earned more than $200 million in entry fees last year from around 600,000 customers.
DraftKings and FanDuel sue to keep operating in Illinois
Online fantasy sports sites DraftKings and FanDuel are striking back at Illinois Attorney General Lisa Madigan who asked that the sites (and similar services) be banned in the state because she believed they were unregulated illegal gambling. Both companies retaliated by suing in separate courts to continue operating in the state.
Illinois AG also thinks daily fantasy is gambling
DraftKings and FanDuel are already fighting to keep their doors open in New York City, and now Chicago is also at risk. Today Illinois Attorney General Lisa Madigan informed state representatives that in her opinion, daily fantasy sports games are unregulated illegal gambling. She did not go as far as the New York AG and attempt to ban their operations (yet), but she did send both companies letters saying they would need to tell IL players they are no longer eligible. Unless new legislation (currently under consideration) is passed, the two could find themselves permanently locked out of one of the United States' largest cities. In a statement, FanDuel claimed the AG's opinion banned all fantasy sports, and said it hopes the legislature brings them back. You can read the complete statement below.
FanDuel, DraftKings can operate in New York for now (updated)
FanDuel and DraftKings will not be allowed to operate in New York while the companies fight in court against state Attorney General Eric Schneiderman, who contends the sites constitute illegal gambling. State Supreme Court Judge Manuel Mendez ruled on Friday that the sites shut down until the legal battle is resolved, noting that the decision is "not a final determination of the merits and rights of the parties," The Wall Street Journal reports. Schneiderman fought for the temporary shut-down, while both sites (unsuccessfully) argued that they should be allowed to operate during the trial.
FanDuel warned staff against winning too often on rival sites
DraftKings and FanDuel may have bitten off more than they can chew when they sued New York to keep their daily fantasy sports games alive in the state. FanDuel's corporate policies from before it self-regulated have been entered into evidence, and some of them only seem to confirm worries about staff abusing their power while playing on rival sites. For a start, the site told workers to "never be among the top five" players on any daily fantasy site, or the top 10 on the tracking site RotoGrinders. They also couldn't have disproportionate numbers of entries in tournaments, and they were supposed to avoid using information on player lineups whenever possible. In other words, don't be too successful -- we don't want you raising suspicions that the games might be rigged.
Daily fantasy sports to stay in Massachusetts with new regulations
As the likes of DraftKings, FanDuel and Yahoo fight to keep their daily fantasy sites open in New York, they'll be able to do so in Massachusetts. Attorney General Maura Healey announced the first set of guidelines for a state to regulate the fantasy sports games rather than outright banning them. According to the new rules, players in Massachusetts must be 21 years of age and companies who run the games are prohibited from advertising on school or college campuses. What's more, professional athletes or folks with ties to a professional sport (agents, employees, etc.) won't be able to play games that focus on that particular sport. For example, an NFL player couldn't participate in pro football daily fantasy games, but could do so for NBA or basketball-related activities. The regulations won't go into effect immediately, though, as Healey asked for a public comment period and a court hearing before making the new rules official. However, daily fantasy companies could be proactive in establishing the new rules, which Healey said she hopes they would do. [Image credit: Bloomberg via Getty Images]
NY Attorney General targets Yahoo's daily fantasy sports next
Yahoo is no stranger to fantasy sports, and its foray into daily fantasy games grabbed the attention of regulators in New York. The internet company is being included in the inquiry into daily fantasy sports by the New York Attorney General's office. Yahoo was subpoenaed alongside DraftKings and FanDuel as Attorney General Eric Schneiderman looks to ban the games in his state. A distant third in the world of daily fantasy, Yahoo launched its version in July and continues to accept payments in the state of New York. However, the company shut down its daily fantasy option in Florida last month after an investigation of the industry began by a federal grand jury. With Schneiderman looking into other operators besides the two top names, it seems his goal is to rid New York of daily fantasy sports entirely and classify the games as gambling. And if he's successful, it'll be interesting to see if other states follow suit. [Image credit: Getty Images]
DraftKings, FanDuel and the feds: The daily fantasy story so far
This season, if you're a sports fan or are even sports fan-adjacent, two words have become nearly inescapable: daily fantasy. The suddenly booming industry has steamrolled TV, radio and the internet with ads promising that playing this "game of skill" can turn your intimate knowledge of sports into big bucks. Its annoyingly bombastic ads alone are enough to make anyone skeptical, since even in this fantasy not everyone can wind up an instant million dollar winner. All of the publicity has worked in FanDuel and DraftKings' favor, making daily fantasy games more popular than ever. That is, until a leak that showed the possibility of insider trading sparked a backlash. Now daily fantasy has the full focus of powerful government figures who may decide if the games will continue.
DraftKings and FanDuel sue to stop New York Attorney General's ban
Following New York Attorney General Eric Schneiderman's request for daily fantasy sports sites DraftKings and FanDuel to stop operating in his state, the two sites filed a lawsuit against the AG. Filing a petition with the New York Supreme Court, both sites allege that Schneiderman's office illegally interfered with their business operations by threatening payment processing vendors if they didn't stop handling transactions for players in New York. The Attorney General also declared the two illegal gambling sites earlier this week, threatening to ban them if they didn't stop operations. The companies maintain that their version of fantasy sports do indeed require skill rather than luck, which separates them from regular ol' gambling.
FanDuel and DraftKings are getting shut down in New York too
The New York Times and ESPN are reporting that New York Attorney General Eric Schneiderman has followed his counterpart in Nevada by asking the two biggest daily fantasy sites to stop taking bets in his state. DraftKings and FanDuel have been struggling to escape a controversy that exploded when reports surfaced that employees were regularly playing, and winning, on the competing websites, and now are facing a future of tighter regulation. According to the letter Schneiderman has decided the games constitute illegal gambling under the laws of New York, and should be banned as games of chance. This is particularly complicated for FanDuel, which has its headquarters in New York. Update: DraftKings said in a statement to Engadget that "We strongly disagree with the reasoning in his opinion and will examine and vigorously pursue all legal options available to ensure our over half a million customers in New York State can continue to play the fantasy sports games they love." Meanwhile FanDuel says, "The game has been played -- legally -- in New York for years and years, but after the Attorney General realized he could now get himself some press coverage, he decided a game that has been around for a long, long time is suddenly now not legal." You can read both statements -- along with a quote from AG Schniederman -- in full after the break.
Fantasy sports industry rushes into self-regulation
In the wake of the insider trading scandal surrounding DraftKings and FanDuel, the multi-billion dollar daily fantasy industry's created a self-governing agency dedicated to making sure affiliated companies stay on the up and up. The existing Fantasy Sports Trade Association is forming a separate organization to do so, dubbed the Fantasy Sports Control Agency that'll design a "strict, transparent and effective system of self-regulation" for the industry. That entails creating a set of ethical standards, enforcing penalties for outfits that don't comply with those standards and an auditing process for maintaining compliance. It's headed up by former Deputy United States Secretary of Labor Seth Harris whose background as a law professor and member of President Obama's cabinet should help him keep everything straight.
Nevada gaming board shuts down daily fantasy because it's gambling
While daily fantasy games (DraftKings, FanDuel and others like them) may have gotten a special exemption for online betting from Congress in 2006, today the Nevada Gaming Control Board decided they do constitute gambling, and shut down their operations (PDF) in the state. Daily fantasy games were already banned totally in some states (Arizona, Iowa, Louisiana, Montana and Washington), but the home of Las Vegas casino gaming is another matter entirely. This follows a tough couple of weeks for the multi-billion dollar industry which has come under scrutiny because so many employees of the two largest competing sites were playing and winning on each other's sites, with questions over whether they could possibly use insider information to get an edge. Both sites have since banned their employees from playing, but the controversy has not gone away.
Feds launch fantasy sports probe due to insider trading scandal
In addition to fighting a class-action lawsuit accusing them of fraud, fantasy sports websites DraftKings and FanDuel now have to face scrutiny from the FBI. According to The Wall Street Journal and The New York Times, feds have been getting in touch with prominent fantasy sports players to ask about their experiences playing on either website. If you recall, both companies are currently embroiled in a scandal after a DraftKings employee leaked data not typically available before the games begin. The same employee was discovered to have won $350,000 within the same week playing on rival website FanDuel. NYT found out soon after that it's not an isolated case: both companies' employees have been raking in big money playing on each other's websites. That gave rise to allegations that they win big by taking advantage of insider info they have access to.
Fantasy sports staff earned obscene cash by playing on rival sites
Those suspicions that DraftKings and FanDuel employees are profiting from being a little too cozy? Yeah, they've just gained some serious credibility. On top of a recent lawsuit accusing the two websites of using insider information to commit fraud, the New York Times has learned that staff at these sites have frequently been raking in huge amounts of cash by playing on each other's sites. Both DraftKings and FanDuel workers have "regularly" ranked as big winners, possibly by using that insider info to gain an unfair advantage. DraftKings co-founder Paul Liberman even noted that some of his team members have made "significantly more money" from competing at FanDuel than they have working their jobs. Taking that option away might discourage people from staying with the company, he claimed.
Recommended Reading: Rick Moranis on the 'Ghostbusters' reboot and more
Recommended Reading highlights the best long-form writing on technology and more in print and on the web. Some weeks, you'll also find short reviews of books that we think are worth your time. We hope you enjoy the read. Rick Moranis Isn't Retired (He Just Doesn't Know How to Change His Wikipedia Page) by Ryan Parker The Hollywood Reporter When the new version of Ghostbusters arrives in theaters next year, a lot of the stars from the 1980s movies will make appearances in the film. Rick Moranis isn't one of them. In an interview with The Hollywood Reporter, Moranis explains that "it just makes no sense" to him and dishes on what he's been doing for the last two decades, including his iOS 9.1 woes.
DraftKings bans employees from betting on fantasy games
Well that didn't take long. After a strong, almost oppressive initial marketing blitz at the start of the NFL season and the announcement that it would soon expand into eSports, DraftKings has come under fire for insider trading. An employee at the company reportedly used non-public information to place winning bets on rival fantasy gaming site, FanDuel, and net roughly $350,000 in a week. New York Attorney General Eric Schneiderman has already opened an investigation into the scheme but not before the DraftKings preemptively banned its employees from putting money down on these games.
DraftKings and FanDuel face questions about 'insider trading'
Massive ad campaigns have made the rise of daily fantasy hard to ignore, but maybe there's one thing that could put the brakes on the likes of FanDuel and DraftKings: scandal. The issue seems to have started with a forum thread on Rotogrinder calling out "Millionaire Maker" information posted early by a DraftKings employee. Usually, that info is not available until after games start because its impact on each football player's value could help someone set up their roster, and it's come under more scrutiny since that same employee won $350,000 in the same week on competing site FanDuel. Now players wonder who has access to what information, when, and if they're using it to gain an edge by playing on rival daily fantasy sites. DraftKings and FanDuel have responded to the controversy with a joint statement, which is included after the break.
