This hasn’t been the best week for the rapidly growing daily fantasy sites, FanDuel and Draftkings. In the short time these sites have been around they have boomed, especially over the past year. But one major loophole just came to light.
These super cash cow websites raking in millions of dollars didn’t seem to teach employees on how to keep it clean. Just like the stock market there should have been some rules put forward for this open market of gambling. If someone can’t profit from insider information on Wall Street, they shouldn’t be able to in the world of Fantasy Sports. Sounds funny, but when DraftKings employee Ethan Haskell walks home with $350,000 in winnings, it becomes serious. This isn’t your office fantasy league anymore.
— Larry Brown (@LBSports) October 6, 2015
Ethan working at DraftKings isn’t, by company policy, allowed to indulge on his website. Instead he made his money on FanDuel, a competitor site. He has insider information gathered by DraftKings data for most commonly picked players. Which could lead for him to have more original teams for better payouts, a buy low sell high style view if you will.
This is simple, either he should have done this more discreetly or these companies should have more strict policies. Since DraftKings found nothing wrong with what he did, theres a clear problem here. In an appearance on Fox Business Network, DraftKings CEO Jason Robins said that the employee, Ethan Haskell, did nothing wrong.
“We have great records of when data is pulled, when communications are sent, so it was quite easy for us to go pull those records and what we found was that he sent this data after his lineup was locked on FanDuel so he had no ability to edit it, so it couldn’t possibly be a situation where that data was useful to him in setting that lineup,” Robins said.
- Good to know but Ethan could have easily leaned over to his friends computer to see everything no? Or is he exiled in the office?
This issue doesn’t seem to have an end in sight. Both sites have banned employees from betting outright, but that seems like a flawed solution. Employees can just as easily have someone else manage a site for them or give out insider information, how can that be proven? So for now this seems to be a growing issue that slipped right past everyone. But the New York Attorney General opened an inquiry into both companies and their investors must be starting to pull out. To add, the major leagues that have stakes in the companies are beginning to distance themselves as well, such as the NFL, NBA, MLB and MLS. This might not mean the end for FanDuel and DraftKings but this can definitely close the free market they’ve been playing in.