The mucky-mucks of the daily fantasy sports sites – and fans of DFS, for that matter – have got to be feeling disheartened right now. This was to the be the season that DFS truly hit the mainstream, the season it all really became a “thing” and the money started flowing for real. And, really, those things have mostly happened, but therein lies the problem. With money comes greed and with attention comes scrutiny.
When player lineup data was leaked by a DraftKings written content manager Ethan Haskell last week, people were a bit confused on exactly what to make of it. Was the information released before lineups locked? When did Haskell or other employees have the data? Did he and others use it to their advantage on FanDuel? Are we blowing all of this out of proportion?
More Public Statements
As the days have gone on, it’s hard to say that things have been made clearer, but the fallout continues. DraftKings and FanDuel initially released a joint statement, but on Monday night, DraftKings sent out a second statement explaining what it believes happened. Courtesy of Fortune.com:
There has been some confusion regarding a recent piece of data that was inadvertently posted on DraftKings’ blog containing information about players and fantasy games. Some reports are mischaracterizing the situation and implying that there was wrongdoing. We want to set the record straight. For the last several days, DraftKings has been conducting a thorough investigation, including examining records of internal communications and access to our database, interviewing our employees, and sharing information regarding the incident with FanDuel. The evidence clearly shows that the employee in question did not receive the data on player utilization until 1:40 p.m. ET on Sunday, September 27. Lineups on FanDuel locked at 1:00 p.m. that day, at which point this employee (along with every other person playing in a FanDuel contest) could no longer edit his player selections. This clearly demonstrates that this employee could not possibly have used the information in question to make decisions about his FanDuel lineup.
So, whether or not people will believe it, DraftKings says that everything was on the up-and-up. The explanation seems reasonable, especially considering a specific time was noted (that could presumably be verified by a third-party if a third-party was to look at the company’s internal records), but that doesn’t mean everyone will say, “Ok, sounds good to us.”
Also on Monday night, the Fantasy Sports Trade Association, the leading industry trade group, released a statement:
The Fantasy Sports Trade Association (FSTA), DraftKings and FanDuel have always understood that nothing is more important than the integrity of the games we offer to fans. For that reason, the FSTA has included in its charter that member companies must restrict employee access to and use of competitive data for play on other sites. At this time, there is no evidence that any employee or company has violated these rules. That said, the inadvertent release of non-public data by a fantasy operator employee has sparked a conversation among fantasy sports players about the extent to which industry employees should be able participate in fantasy sports contests on competitor sites… DraftKings and FanDuel have decided to prohibit employees from participating in online fantasy sports contests for money.
It’s unfortunate that it had to come to that as I’m sure DFS site employees enjoy playing fantasy, too, but barring them from doing so is probably a good thing, even if it’s just for optics. And again, if what DraftKings and the FSTA have said is true, then it does appear that all we have right now is a perception problem. But as we know, especially from the online poker world, where there’s smoke, there very well could be fire.
State of New York Getting Involved
And now, according to the New York Times, the Attorney General for the State of New York is going to play the role of fire marshall. In an article posted Tuesday, the Times is reporting that the AG has launched an inquiry into the situation, requesting information from both DraftKings and FanDuel. Division of Economic Justice Internet Bureau Chief Kathleen McGee, on behalf of New York AG Eric Schneiderman, sent a letter to the heads of both companies, asking them to answer a number of questions about how statistical data is handled, who has access to it, what company policies are in regards to such sensitive information, and what the companies might know about an improper use of data. Both companies have until October 15th to respond.
In a radio interview Tuesday prior to the announcement of the inquiry, Schneiderman said, “It’s something we’re taking a look at — fraud is fraud. And, consumers of any product, whether you want to buy a car, participate in fantasy football, our laws are very strong in New York and other states that you can’t commit fraud.”
FanDuel is based in New York City, while DraftKings operates out of Boston.