Inquiry on Fantasy Sports Leagues Based on Allegations of Questionable Employee Activity

NJ Spotlight News | October 7, 2015 | Sports
An investigation has been launched on fantasy sports leagues on allegations of questionable activity by employees.

By Brenda Flanagan

The rules are clear, betting on football is illegal in New Jersey. But it’s different for fantasy sports like DraftKings Daily Fantasy Football.

“Win a million dollars playing fantasy football,” says a DraftKings ad.

In fantasy football, you pick players and score points based on their performance in actual NFL games. Players can bet real money on their fantasy teams and — if they choose the right players — can win up to $2 million because a legal loophole classifies fantasy sports as unregulated games of skill, the companies advertise that.

“Spinning it so they make the players think they are the ones in control of making the decision, that it’s their knowledge that’s gonna win them the money,” said Jeff Kirpas.

But fantasy football fan Kirpas says, many players called foul, after hearing reports that employees at fantasy sports firms FanDuel and DraftKings allegedly used inside information to rig their bets and win hundreds of thousands of dollars.

“If you know the info that goes into making decisions, why players have certain values, it definitely gives you an advantage,” Kirpas said.

“Has this shaken the public’s confidence in this process?” asked Rick Gentile.

Seton Hall Sports Poll Director Rick Gentile says, a recent survey shows more than half of folks polled consider Fantasy Sports a form of gambling, anyway — only a third figure they’re games of skill.

“Not only are they advertising on the air on NFL games but the several of the owners are investors. This is now big business and it should be regulated and I think they need to do a little damage control,” said Gentile.

New York’s Atty General launched his own investigation into the allegations, asking both FanDuel and DraftKings for more information because its employees activity “…raise(s) legal questions related to the fairness, transparency and security of DraftKings/FanDuel and the reliability of representations your company has made to customers.” New Jersey pols want more accountability, too.

“These guys in the wild west of fantasy sports are cheating and gambling and making money thru inside trading. Just another reason why we should have regular sports betting in the state,” said Rep. Frank Pallone.

Pallone and Sen.Bob Menendez sent the Federal Trade Commission a letter asking, “We ask whether the FTC has sufficient jurisdiction to promulgate regulations that include safeguards against this behavior, or whether additional legislation is needed…”

Meanwhile, DraftKings released a statement saying, “We have just received and reviewed the letter from the N.Y. attorney general, and the company will fully cooperate with the inquiry.” FanDuel said, “…there is no evidence indicating that the integrity of FanDuel’s contest was in any way compromised…We have permanently banned our employees from playing any daily fantasy games for money, on any site.”

Critics claim this scandal could do serious damage to fantasy sports. Which is perhaps why FanDuel also said it looks forward to speaking with regulators about setting some rules for its booming industry.

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