FBI and DoJ launch investigation into daily fantasy sports
Federal government looking into whether DFS violates the Unlawful Internet Gambling Enforcement Act
The US Department of Justice (DoJ) and the Federal Bureau of Investigation (FBI) have launched an investigation into the daily fantasy sports sector and its two billion dollar behemoths FanDuel and DraftKings following last week’s data leak scandal.
The DoJ and the FBI are believed to be investigating whether daily fantasy sports violates the Unlawful Internet Gambling Enforcement Act (UIGEA), despite operators claiming there is a carve out permitting fantasy sports as a game of skill.
According to reports in the Wall Street Journal, FBI agents have been contacting DraftKings’ customers to ask them about their experiences with the Boston-based operator. The probe is in the preliminary stage, and is part of a wider investigation by the DoJ into the sector.
“It is entirely predictable that the government would follow up on the misleading reports about our industry,” a DraftKings spokeswoman said in a statement.
“We have no knowledge of the specifics of any federal investigation but strongly disagree with any notion that our company has engaged in any illegal activities.”
The daily fantasy sports sector, and particularly DraftKings, came under intense scrutiny last week after DraftKings employee Ethan Haskell leaked player line-up data ahead of the third week of the NFL season. Days later he went on to win £225,000 on rival site FanDuel.
Following the scandal both FanDuel and DraftKings blocked their employees from playing on rival sites, but the fall out is set to rumble on with the New York attorney general launching an investigation into both operators off the back of the leak.
A disgruntled player from Kentucky has also filed a class action lawsuit against the pair, while New Jersey lawmaker Frank Pallone continues to call on Congress to investigate the “murky” legal status of daily fantasy sports.