DraftKings hires compliance firm, partners GeoComply

25 November 2015

Daily fantasy sports (DFS) operator DraftKings has brought in regulatory risk and compliance company Exiger and launched a new geolocation solution from GeoComply in an effort to regain public support following recent criticism of its services.

DraftKings has come under fire in recent weeks after it was revealed one of its employees released inside information and was able to win a significant real-money prize through competitor FanDuel.

The fallout from the incident has been widespread across the US DFS market, with Nevada opting to ban unlicensed DFS contests in the state, while New York ruled DFS constitutes illegal gambling and has ordered DraftKings and FanDuel to stop taking bets from players in the state.

DraftKings and FanDuel are expected to face off against New York State Attorney General Eric Schneiderman in court today (Wednesday).

In an effort to address criticism, DraftKings has hired Exiger to conduct a review of its financial, operational, compliance and risk controls.

DraftKings confirmed in a statement that Ray Pollit, a former FBI special agent who served as the lead case agent in the US government's investigation of online poker, will head up the company-wide review.

Meanwhile, DraftKings has also linked up with GeoComply to strengthen its own geolocation abilities, having attracted criticism for a perceived inability to block users based on their location.

In a statement, DraftKings said GeoComply's geolocation services are designed to verify player eligibility for its own website, based on a player's current location.

Common methods used to circumvent location checks such as proxies are restricted and will invalidate a player's eligibility.

“We are committed to the integrity of our product, which is why we are partnering with GeoComply to leverage their industry-leading geolocation compliance solution,” DraftKings chief operating officer Paul Liberman said.

“The introduction of this new service is part of our ongoing efforts to ensure that we continue to meet and exceed the increasing demands within the DFS industry, while also continuing to innovate.”

Anna Sainsbury, chief executive of GeoComply USA, added: “DraftKings has been an innovative leader in the DFS industry and we’re proud to offer our services on their site and to their players.”

Related articles:

New York Attorney General declares DFS illegal gambling

DraftKings and FanDuel hit by DFS Nevada ban

DraftKings and FanDuel defend business integrity after data leak