Companies have until October 15 to respond

New York Attorney General opens inquiry into fantasy sports sites

2015-10-09
Reading time 1:12 min
The New York attorney general began an inquiry Tuesday into the prospect that employees of daily fantasy football sites have won lucrative payouts based on inside information not available to the public, asking two leading companies, DraftKings and FanDuel, for a range of internal data and details on how they prevent fraud.

The attorney general’s move may shed light on the inner workings of the sites, which charge a fee and allow participants to build rosters of hypothetical teams and score points against hundreds of competitors based on the actual performance of players. The sites say payouts can reach $2 million.

In a letter to both companies, Attorney General Eric T. Schneiderman demanded the names, job titles and descriptions of any employees who aggregate and compile a wide range of data that perhaps could be used to gain a personal advantage — including ownership percentages and pricing algorithms.

The companies have until Oct. 15 to respond. Mr. Schneiderman also demanded that the companies turn over details of any internal investigations into their employees, including the one at the center of the current scandal, Ethan Haskell of DraftKings.

It was Mr. Haskell who admitted last week to inadvertently releasing data before the lineups of all N.F.L. games were locked in for the third week of the season in late September. That same weekend, Mr. Haskell, a midlevel content manager, won $350,000 at FanDuel.

The two companies said they had investigated Mr. Haskell and cleared him of wrongdoing.

“It’s something we’re taking a look at — fraud is fraud,” Mr. Schneiderman said in a radio interview early Tuesday before the inquiry was announced. “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.”

 

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