DraftKings Employee Wins $350K on FanDuel After Releasing Valuable Data

Tuesday, October 06, 2015

Patrick Sargent, GoLocalWorcester Reporter

Controversy is piling up recently for Boston-based fantasy sports site DraftKings and competitor FanDuel.

Last week, a DraftKings employee released fantasy football data charting ownership of NFL players in lineups prior to the start of week three's games. This data typically waits until the games start and by releasing it early gives players advantages of their opponents.

According to a report by the New York Times, that same employee won $350,000 on competing site FanDuel that same week.

A joint statement was released by FanDuel and DraftKings on Monday. The statement read: Nothing is more important to DraftKings and FanDuel than the integrity of the games we offer to our customers. Both companies have strong policies in place to ensure that employees do not misuse any information at their disposal and strictly limit access to company data to only those employees who require it to do their jobs. Employees with access to this data are rigorously monitored by internal fraud control teams, and we have no evidence that anyone has misused it.

However, we continue to review our internal controls to ensure they are as strong as they can be. We also plan to work with the entire fantasy sports industry on this specific issue so that fans everywhere can continue to enjoy and trust the games they love.

As GoLocalWorcester reported last month, Massachusetts Attorney General Maura Healey announced that her office would be conducting an investigation into DraftKings’ legality and whether or not its meets the criteria to comply with state laws on online betting.

Just days after AG Healey’s announcement, the NCAA ruled that DraftKings, and sites like it, will be considered gambling under their student code of conduct.

In a statement released to Re/code, the NCAA said, “NCAA members schools have defined sports wagering as putting something at risk — such as an entry fee — with the opportunity to win something in return, which includes fantasy league games. Because of this, student-athletes, coaches, administrators and national office staff may not participate in sports wagering, including fantasy league games with a paid entry fee.”

If a student is found to be wagering on DraftKings, that student will automatically lose one year of eligibility.

DraftKings is a multi-billion dollar company which awards daily and weekly prizes up to $10 million.

According to the Fantasy Sports Trade Association, sites likes DraftKings.com and FanDuel.com are legal because gamers have to possess skill to account for statistics, facts and game theory, the U.S. government’s 2006 Unlawful Internet Gambling Enforcement Act stipulated that fantasy sports were legal, organizations such as the NFL and MLB support fantasy sports while strictly enforcing rules against illegal gambling, and that fantasy sports players behave differently than other gamblers and participate in fantasy sports for reasons other than money.