Seth Vigdor
Are you a diehard Daily Fantasy Sports fan like I am? Well, here’s some news that you’re not going to like. We’ve been duped. A huge scandal has erupted in the world of DFS and it’s the equivalent of insider trading in the world of Wall Street. Joe Drape and Jacqueline Williams unveiled a huge scandal in this New York Times article, which basically is summed up as insider trading. No bueno.
A DraftKings employee came forward last week and admitted to releasing data, mistakenly, or so we’re being told right before Week 3. As it turns out, that employee won $350,000 from DraftKings rival FanDuel that same week. What’s alarming here is that we need to know who at these DFS companies has access to this data and what measures are being taken to protect this data.
Unless you’re living under a rock, if you watch any NFL game, you’ll see the nonstop advertisements for DraftKings and FanDuel. Hell, if you turn on ESPN or Fox pre-game shows, the analysts are talking about DFS lineups nonstop. DraftKings and FanDuel have set up daily and weekly games that fans will pay an entry fee to get into. You can play freerolls, or $1, $2, $3 games OR if you’re a big dog, you can play $500, $2,500 or even $5,000 games. It’s endless and these sites are making major bank off of us, which brings us back to the issue at hand.
A spokesman for DraftKings acknowledged that employees at both major DFS companies have been winning big jackpots at other DFS sites. Employees from both companies have been banned from playing games at any other site. Apparently, the employees are already banned from playing DFS games at their own sites.
Something is fishy here. Something tells me that more people are in the know of what’s going on.
Both DraftKings and FanDuel state that there are systems in place to monitor potential internal fraud. But, anyone that works in an office environment knows that no system is perfect. There’s always a way around “rules” that are in place.
Surely, this will [and should] propel Congress to get involved and launch their own internal investigations on this matter, if not but for selfish reasons. You know how our Congress rolls, but don’t let that skew the fact that something fishy is going on here. The data that the DraftKings employee released showed which players were being used the most in all lineups to the site’s Millionaire Maker contest. That information isn’t released typically until the games begin. Anyone who had access to that info could then make lineup decisions based on what other players were doing. The key with DFS is that you want to pick lineups that obviously succeed, but that aren’t similar to the other user’s lineups. Standing out is what it’s all about.
The DraftKings spokesperson stated that the employee simply made a “mistake” and didn’t use the information improperly. How do they know? Did they conduct a thorough investigation? Even if they did within a week’s time, which is clearly bullshit, shouldn’t these companies have watchdog companies policing them as an outside arbiter? It’s like the NFL investigating the NFL. It’s a joke and considering the Average Joe is putting so much money into these sites, I think the people are owed a proper investigation. Does the name Edward Snowden ring a bell? Like him or not, he exposed a lot of dirty secrets to what the government was doing in which they shouldn’t have been doing. At any company there are people that know how to work the system. Do you mean to tell me that no one at either DraftKings or FanDuel would use insider data for the better of themselves? I wasn’t born yesterday, and neither were you. We need answers and we need them now.
Remember this: Many of these employees at these sites set the prices of these players and the algorithms for scoring. They set the market. This employee that made this admission knows more and he’s not the only one. I’m certain that if properly investigated, there are some higher ups that know some secrets. This opens the door to proper regulations, but for the moment, people have some explaining to do.