The lucrative world of online fantasy sports gaming faced an inquiry from New York authorities Tuesday over allegations of "insider trading" critics say underscored the need to better regulate the multibillion-dollar industry.
The New York Times reported late Tuesday that New York state Attorney General Eric Schneiderman had written to fantasy sports companies DraftKings and FanDuel to request names, job titles and descriptions of staff with access to data that could potentially be used to gain an advantage.
Schneiderman also requested information from internal investigations carried out by the companies.
"It's something we're taking a look at -- fraud is fraud," Schneiderman said in a radio interview before the inquiry was announced.
The inquiry follows revelations that an employee from DraftKings had won $350,000 (RM1.5 million) on rival site, FanDuel.
The employee stands accused of using data not available to the general public -- such as information on which players were the most popular fantasy picks -- to help win big on other sites.
In the past decade, fantasy sports websites in the United States have soared, with the numbers of participants skyrocketing from 12.6 million in 2005 to an estimated 56.8 million in 2015.
'Companies cry foul'
A proliferation of sites offer fans the chance to make money by assembling fantasy American football or baseball lineups, which then score points based on the actual performances of real athletes playing each week.
DraftKings has denied any wrongdoing on the part of the employee embroiled in the case, saying that an internal investigation had shown the worker had only received the data in question after he had entered his fantasy lineup on the FanDuel website.
The employee received the data at 1:40 pm on September 27 -- 40 minutes after the deadline for FanDuel team lineups closed, DraftKings said.
"This clearly demonstrates that this employee could not possibly have used the information in question to make decisions about his FanDuel lineup," DraftKings said in a statement.
"Again, there is no evidence that any information was used to create an unfair advantage, and any insinuations to the contrary are factually incorrect."
Both DraftKings and FanDuel had issued an earlier joint statement assuring that both companies had policies in place to prevent the misuse of information.
Access to data was limited only to employees who needed it to do their jobs. DraftKings and FanDuel have also banned employees from playing.
'Clarion call' for regulation
Yet the company assurances failed to impress advocates of greater regulation.
Chris Grove, of the Legal Sports Report website, said the joint statement from DraftKings and FanDuel should serve as a "clarion call" for swift external regulation.
Grove argued that the controversy left unanswered questions "because there's no central force articulating and enforcing minimum standards, no one entity that can credibly describe the state of the industry on these key issues."
"That is simply an unacceptable status quo when millions of players will risk billions of dollars this year on games they've been told -- but can't be shown -- are fair," Grove stated.
The controversy is also likely to amplify calls from US lawmakers to examine the fantasy sports industry more closely.
Last month, Democratic Congressman Frank Pallone, a senior member of the House Energy and Commerce Committee, called for a hearing to look at fantasy sports and its relationship to gambling.
"Despite how mainstream these sites have become, though, the legal landscape governing these activities remains murky and should be reviewed," Pallone said.
AFP
Wed Oct 07 2015
In the past decade, fantasy sports websites in the United States have soared with 12.6 million participants in 2005 to 56.8 million in 2015. - File Photo
Who is Prabowo Subianto, incoming president of Indonesia?
A wealthy ex-general with ties to Indonesia's popular outgoing president and its dictatorial past, looks set to be its next leader.
Iran's supreme leader says Hamas leader's death will not halt 'Axis of Resistance'
The "Axis of Resistance", built up with years of Iranian support, includes Hamas, the Lebanese Hezbollah group, the Houthi movement in Yemen, and various Shi'ite groups in Iraq and Syria.
Putin says Russia willing to seek compromises between Iran and Israel
Russia is ready to help seek compromises between arch-foes Israel and Iran, President Vladimir Putin said on Friday, saying these would be difficult but possible.
What proposals will Russia push at the BRICS summit?
The proposal is also to establish a BRICS reinsurance company to allow uninterrupted shipment of goods and key commodities between members.
Indonesia's free meals plan in the spotlight as Prabowo readies for office
Prabowo calls the programme one of the main drivers of economic growth, eventually set to add an estimated 2.5 million jobs.
Astro AWANI's revamped English news website, AWANI International, launches on Oct 21
Astro AWANI's revamped English platform delivers in-depth global news and expert analysis to keep you informed on key developments.
Israeli strikes kill 33 people in Jabalia refugee camp in Gaza, medics say
Residents of Jabalia said Israeli tanks had reached the heart of the camp after pushing through suburbs and residential districts.
Liam Payne's ex-partner calls for media restraint after 'painful' death
Cheryl Tweedy used her statement to urge the media to remember they had a seven-year-old son, Bear, who could read the reports.
Analysts: Indonesia's strong MoF leadership team to boost investor confidence
Sri Mulyani Indrawati as head of Indonesia's Ministry of Finance is expected to instil confidence among investors.
Biden offers both a carrot and a stick to Israel as his term nears an end
Israel has frequently resisted US advice and has caused political difficulties for the Biden administration.
Putin says BRICS will generate most of global economic growth
Russian President Vladimir Putin will host a summit of the group in the city of Kazan on Oct. 22-24.
ISIS Malaysia's perspective of Budget 2025
An excellent rakyat-centric budget under the overarching principle of a caring and humane economy.
Budget 2025: Record increase in STR, SARA aid initiatives
The government will provide a significant boost to the Sumbangan Tunai Rahmah (STR) and Sumbangan Asas Rahmah (SARA) initiatives next year.
Budget 2025: EPF contributions to be made mandatory for foreign workers – PM Anwar
The government plans to make it compulsory for all non-citizen workers to contribute to the Employees Provident Fund (EPF).
What policies to expect from Indonesia's new President Prabowo
Prabowo will be open to foreign investment, his aide has said, such as by offering investors management of airports and sea ports.
Budget 2025: Govt allocates RM470 mil to empower women's participation in PMKS
The Women's Leadership Apprenticeship Program will be intensified as an effort to produce more female corporate personalities.
Israel sends more troops into north Gaza, deepens raid
Residents of Jabalia in northern Gaza said Israeli tanks had reached the heart of the camp, using heavy air and ground fire.
Indonesia ramps up security ahead of Prabowo's inauguration
Prabowo Subianto will be sworn in as Indonesia's president on Sunday with Vice President-elect, Gibran Rakabuming Raka, also taking office.
Immediate allocation of RM150 mil for local authorities, DID to tackle flash floods
Datuk Seri Anwar Ibrahim said this allocation is intended to address the recent flash floods that hit the capital and several major towns.
Budget 2025: Sabah, Sarawak to continue receiving among highest allocations - PM
Sabah and Sarawak continues to be prioritised under Budget 2025, with allocations of RM6.7 billion and RM5.9 billion respectively.