On Monday, allegations of "insider trading" scandalized the fantasy sports industry — and some people online aren't surprised at all.
In case you're not involved in the world of fantasy sports, here's what you need to know from New York Times reporters Joe Drape and Jacqueline Williams:
Last week, a DraftKings employee admitted to inadvertently releasing data before the start of the third week of N.F.L. games, a move akin to insider trading in the stock market. The employee – a midlevel content manager — won $350,000 at rival site FanDuel that same week.
The incident has raised questions about who at daily fantasy companies has access to valuable data, how it is protected and whether the industry can — or wants — to police itself.
The data in question is, according to the Times, "what particular players were most used in all lineups submitted to the site’s Millionaire Maker contests."
While details of the scandal continue to emerge, some folks on Reddit are claiming they always knew something was amok with these massive fantasy sites.
"I don't understand why this is even a surprise. If the employees design the algorithms to price the players effectively why wouldn't thye reverse them to their own benefit? If you are going to buy into these sites, this has to be assumed," ChicagoOandB wrote.
"Honestly did anybody not see something like this coming?" Captain_Koivo wrote.
On Monday, DraftKings and FanDuel issued a joint statement.
"Nothing is more important to DraftKings and FanDuel than the integrity of the games we offer to our customers," the statement read. "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."
Fantasy sports are considered a game of "skill," rather than "luck," so they're currently legal in all states and not subject to the same laws as online gambling, though some Redditors believe that is all about to change.
"This is it. This could very well be the straw that breaks the camel's back," ChaosOnion wrote. "This could bring down federal regulations that affect any kind of Fantasy Football that involves money, including your office pool. To this point, Fantasy Football has been classified as a game and not gambling, but just like online poker, it only needs a little push to get your friendly neighborhood legislature interested in regulation."
Earlier this fall, a New Jersey congressman proposed reviewing the legality of fantasy sites like FanDuel and DraftKings.
The fantasy industry generated over $2.5 billion this year, and is estimated to generate over $14 billion by 2020, the New York Times also reported.
Here's the full statement from the companies:
While there has been recent attention on industry employees playing on FanDuel and DraftKings, 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.
