Fantasy Sports Betting Under Legal Fire
posted by Kyle Franck | November 25, 2015 | In SportsA $350,000 winning online bet has spurred a class action lawsuit against two big names in online sports betting.
FanDuel and DraftKings are two of the largest online sports wagering websites in the world. After the surge of energy in sports fans back in the early 2000s when online fantasy sports became popular. Since then the gambling industry has formed around online sporting websites to form a $42 billion a year business.
Those who play in fantasy sports leagues like those found on Yahoo and ESPN, are probably familiar with FanDuel and Draft Kings and the amount of winnings they advertise in their commercials.
Although the newly filed lawsuit claims heavy winnings fraudulently won by employees at the companies, over $34 million has been given out in prize money through FanDuel since 2014, according to their spokeswoman.
During their own investigation into the large payout, DraftKings released the information that the employee in question, Ethan Haskell, had no prior player or team knowledge before entering his roster during that week’s tournament, giving him no statistical advantage against other players.
The main issue at hand is the ethics and legality of allowing employees of one online sports betting company wager on games hosted by another company. Depsite not betting on their own company’s fantasy sports league, the employees would have knowledge far greater than the average person.
This has been shown to be a huge amount of money being paid out to employees of both FanDuel and DraftKings who have betted on the online sports leagues. In fact, a press release by FanDuel stated that its employees only won 0.3 percent of the overall winning given out in 2014. This is still roughly $6 million.
The lawsuit focused on this aspect as well, containing claims that both FanDuel and DraftKings are allowing insider information between employees, giving unfair circumstances to unknowing gamblers outside their own companies.
The lawsuit has been filed in two locations and will be overseen by both the U.S. Attorney’s Office in Boston and in Manhattan, according to law enforcement officials interviewed by CNN, ABC News and MSNBC.
Investigation has been underway since September according ESPN.com and also the represntatives of both FanDuel and DraftKings were required to turn over information on the matter by October 15th, which is now under review.
The recent legal issues have also sparked a resurgence in a focus on online gambling forums in the United States and their impact on economic and social norms. Many notion that not only are online gambling companies offering exaggerated outcomes to their clients, but also romanticizing the field of betting as a career, according to CNN.
CNN reports both FanDuel and DraftKings publicize more advertisements than many other large corporations on the internet, making their brand a common thing for internet users of any age.
As of the end of October 2015, the Federal Supreme Court will be determining soon not only the outcome of the lawsuit against FanDuel and DraftKings, but also the possibility of further restricting the online gambling industry or outlawing it entirely as other states such as Arizona and Washington have done.
Starting in November, Nevada regulators ruled that playing online fantasy sports daily is considered gambling under state law, requiring websites such as DraftKings and FanDuel to be shut down until they obtain proper state licensing. This could become the new trend for many states to follow.
Both companies denied to comment on the allegations and case, still continuing online operations. Fantasy sports fans will be able to enjoy the services of FanDuel and DraftKings in most states until further litigation occurs.
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