The FBI has begun an inquiry into the practices of booming daily fantasy sports websites after players of the games and lawmakers made allegations of predatory tactics and questioned the use of inside information, according to fantasy players who said they had been contacted by investigators.
The FBI has begun an inquiry into the practices of booming daily fantasy sports websites after players of the games and lawmakers made allegations of predatory tactics and questioned the use of inside information, according to fantasy players who said they had been contacted by investigators.
The FBI began contacting several prominent competitors in the contests shortly after an employee of DraftKings, one of the two most prominent daily fantasy companies, admitted to inadvertently releasing data before lineups for the start of the third week of NFL games were locked in. The employee, a midlevel content manager, then won $350,000 at a rival site, though DraftKings said he did not have an advantage.
The inquiry is primarily focusing on DraftKings — a Boston-based company — and is also examining whether the site encouraged and accepted deposits and bets from states where the contests are prohibited. The information under review includes posts by Jon Aguiar, an executive in charge of developing high-volume fantasy players, on a public thread informing players how to deposit funds and play in contests in states and countries where the games are prohibited.
The daily fantasy sites, worth billions of dollars on paper because of a surge of investors, have exploded in popularity and this season have blanketed football game broadcasts with ubiquitous advertisements to lure more participants, who pay an entry fee, build virtual rosters of players from actual teams and win prizes, from $22 to up to $2 million, based on the performance of the chosen players in real games. Major League Baseball and the NBA, along with New England Patriots owner Robert Kraft and Dallas Cowboys owner Jerry Jones, are among investors in the sites, along with NBC, Comcast and Fox.
The FBI agents also want to know whether employees of DraftKings passed on proprietary information or preyed on fantasy players in contests, according to the players.
DraftKings, as well as rival FanDuel, have acknowledged that their employees — many of whom regularly rank among the most consistent big winners — have played and won significant money on each other’s sites.
FanDuel spokeswoman has acknowledged that DraftKing employees have won less than $10 million on their site. In the wake of the scandal, they banned their employees from competing in any contests.