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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 is expanding its online gambling services to eSports
Online gambling site DraftKings told Re/code on Wednesday that it will expand its fantasy services beyond professional baseball and American football. Beginning next month, DraftKing users will be able to test their fantasy team management mettle in the rapidly-growing realm of eSports. In fact, the new service is slated to debut in time for the start of the League of Legends World Championship in October. Additionally, the company will partner six eSports teams for in-event promotions.
Forget football: How fantasy sports are helping kids learn
By his second semester on the job in 2009, Eric Nelson, a civics and history teacher at North Lakes Academy in the Minneapolis suburbs, was at a loss. No matter what tool he used -- gripping news articles, an interactive map of YouTube trending videos, a failed-state index -- he couldn't manage to keep his students interested in world events for any extended period of time. "They were just zombies," he recalls.
Disney is pouring $250 million into a fantasy sports site
Disney apparently doesn't think it's enough to offer sports coverage through ESPN... it wants to fuel your fantasy leagues, too. Wall Street Journal sources report that the House that Walt Built is investing $250 million into DraftKings, a fantasy sports website that lets you play for real cash. The deal is believed to be all about complementing ESPN's various platforms with ads and services that are both relevant and, of course, profitable. DraftKings is expected to spend $500 million on ESPN ads in the "coming years" -- that's a lot of money to reap from friendly rivalries and office pools. The pact wouldn't completely lock out competitors like the Comcast-backed FanDuel, but they'd undoubtedly be left reeling by losing exposure on one of the largest sports networks. [Image credit: Christian Petersen/Getty Images]
Yahoo will stop letting users log in to its site with Google and Facebook accounts
In an effort to get you to return to that Yahoo ID from back in the day, Yahoo says it'll be phasing out the ability to log in through Google and Facebook accounts. The company says this will allow it to offer "the best personalized experience to everyone." Yahoo only started allowing these third-party logins in 2010 -- not that long ago. While the change has already happened on its Fantasy Sports service, Google and Facebook login buttons will eventually (no timeline was given) disappear from all Yahoo web properties, which includes the likes of Flickr and tumblr. Now, to remember the password for lostfan_1985.