DraftKings clears employee of wrongdoing over data release

21 October 2015

DraftKings has cleared an employee of any wrongdoing after it was alleged he used insider information to win $350,000 (€308,300) on a website operated by rival daily fantasy sports (DFS) company FanDuel.

Ethan Haskell, a manager at DraftKings, released key data on fantasy teams for the NFL American football league and won the real-money prize on FanDuel in the same week.

Data released by Haskell showed which NFL players were most used in teams submitted to the website’s ‘Millionaire Maker’ contests, with this data not usually released until the line-ups for games have been completed. Furthermore, having such information prior to entry deadline is seen as offering an advantage.

However, US Attorney John Pappalardo, hired by DraftKings to investigate the case, has ruled that Haskell could not have used the information in question to win the contest on FanDuel.

The investigation found that Haskell did not receive the data until 40 minutes after he had locked up his line-up on the FanDuel contest.

“It would have been impossible for Mr Haskell to have used such non-public information,” DraftKings said in a statement.

DraftKings and FanDuel have banned staff from playing contests on rival websites following the allegations earlier this month, but the Haskell case has raised concerns as to whether there is sufficient regulation of the US DFS market.

Nevada last week ruled that DFS companies cannot operate in the state without a gambling licence, ordering operators without the necessary permit to cease operations in the state.

Meanwhile, DraftKings and FanDuel are the subject of a class action lawsuit in the US, while New York Attorney General Eric Schneiderman has launched an inquiry into both companies to consider the advantages DFS employees may have gained using data to win prizes with competing operators.

In addition, the US Department of Justice and the FBI are said to be in the early stages of investigating daily fantasy sports operators while, in Florida, a Grand Jury has been convened to investigate whether DFS is in breach of state law.

As a result of the ongoing regulatory concerns, Amaya this week announced that its StarsDraft DFS brand has ceased offering real-money contests in a number of states.

Related articles: Amaya to limit fantasy sports in US pending state regulation
DraftKings and FanDuel hit by DFS Nevada ban
US DoJ, FBI to probe daily fantasy sports - report
DraftKings and FanDuel face class action lawsuit
DraftKings and FanDuel defend business integrity after data leak