Everything You Need To Know About The DraftKings/FanDuel Scandal

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Everything You Need To Know About The DraftKings/FanDuel Scandal

It’s been a crazy few weeks in the world of daily fantasy sports. What originally started as a data leak from DraftKings has now morphed into a federal investigation and total ban across the state of Nevada. Feel like you don’t know the story? You’re not alone. Read on to get caught up on the insanity that is daily fantasy sports.



When lawmakers passed the Unlawful Internet Gambling Enforcement Act in 2006, they specifically didn’t ban “skill-based” contests. While Arizona, Iowa, Louisiana, Montana, Nevada and Washington made their own laws with more restrictive requirements on what is “skill based,” most states went along with the federal decision.



Three years later, FanDuel was started. The company has since raised over $360M in funding from investors like NBC Sports Ventures and Comcast Ventures. They have also partnered with 16 NFL teams, 15 NBA teams, and have given an equity stake to the NBA.



Founded in 2012, DraftKings has raised $375M from investors like the MLB, The Kraft Group (owner of the Patriots), and Fox Sports. Additionally, the company has two, $250M advertising deals with both ESPN and Fox Sports. DraftKings is also partnered with the NFL, NASCAR, UFC, Staples Center, Madison Square Garden, five NFL teams, and 25 MLB teams.


September 27th, 2015

On Sept. 27th, DraftKings employee Ethan Haskell accidentally posted team ownership data on DraftKing’s blog. Anyone possessing this data has an immense competitive advantage, mainly because daily fantasy sports revolves around picking key players that your opponents haven’t drafted.


October 4th, 2015

FanDuel’s large Sunday Millions contest ends, and guess who finishes in second place with a prize of $350,000? None other than Ethan Haskell, the DraftKings employee who had access to the previous weeks lineups! While DraftKings quickly deny that Haskell had access to the information before FanDuel lineups for the week locked, it definitely looks extremely suspicious.


October 6th, 2015

DraftKings, FanDuel, and The Fantasy Sports Trade Association (FSTA) release a joint statement temporarily restricting employees from playing on any competitors sites.


October 14th, 2015

The WSJ reports that both the U.S. Justice Department and the FBI have opened an investigation into whether daily fantasy sports is a form of gambling, thus violating federal law. Additionally, the New York Attorney General’s office asked both companies for internal data including win/loss records and player pricing algorithms.


October 14th, 2015

The same day, Politico reports that FanDuel hired its first D.C. lobbying firm, as well as joined the Internet association, a D.C. trade group for tech companies. Additionally, the blog reported that the NFL is having its D.C. office contact House member to prevent a hearing on daily fantasy sports.


October 15th, 2015

The Nevada Gaming Control Board rules that daily fantasy sports is traditional gambling, meaning it needs a state-issued gambling license. In the interim, all daily fantasy companies have to cease operations until they receive a license. This is a big deal, since most states look to the Nevada Gaming Board as a trendsetter in gambling regulation.


October 19th, 2015

After explosive growth early in the season, the daily fantasy sports industry fumbles. Bloomberg reports that last weekend was the slowest yet for both FanDuel and DraftKings. This could be a sign that fans are responding negatively to these allegations, and pulling back from what they may now conceive to be unfair contests. While the future of daily fantasy sports is still up the air, its clear that both companies have a lot of work ahead of them if they want to convince the nation that their games are 100 percent skill-based.


Oct 27th, 2015

Illinois introduces legislation to regulate DFS sites like Fanduel and DraftKings. Specifically, the legislation will apply a stricter definition to daily fantasy sports, ensuring it isn’t gambling or sports betting, which would violate the state’s criminal laws. It will also require that anyone under the age of 18 is banned from participating in the daily games.


Nov 10th, 2015

NY State Rules Daily Fantasy Illegal, Ordering FanDuel & DraftKings To Stop Taking Bets. Sites like them have been categorized as “illegal gambling sites” and have ordered them to cease taking money from the residents of New York state.