DraftKings and FanDuel – The scandal
I remember playing fantasy football as a lad. It was all done by post and you took over a real team and managed the team selection and tactics. I sent it off promptly with my two pound coins cellotaped to the inside and waited patiently for a week to see which team had beaten me this time and by how much. Oh those pre-internet days.
Fast forward 20 years and the yanks have taken the idea into orbit. Currently the industry over there is worth $2bn a year and some major teams hold stakes in the fantasy sports company such as Fanduel and DraftKings.
The modern game involves filling your team with players from different teams and the performance of those individual players in their roles is added up to give a final score and, logically, the highest score wins. The big money mentioned comes from the entrance fees and prize money.
The recent controversy erupted when an employee associated with DraftKing and Fanduel entered a high stakes competition and won a whopping $350,000.00. Interesting that he is even allowed to play I thought, an ethical grey area if there ever was one. The laws in the U.S. differ from state to state and apparently with fantasy sport, employees betting on games that they themselves run, is fine… legally speaking.
The ‘lucky’ winner of this huge sum sent the raised, questioning eyebrows of his competitors in to a full blown frenzy when it was revealed that he ‘inadvertently’ posted non-public data about other player’s fantasy teams on his blog before he won the contest and the money.
It is indisputable that the employee had access to information that other players did not. How can it be fair that he takes part? If he can see the selection trends of his competitors he can formulate a team that gives him an edge. In a game like this, a small edge goes a long way. It clearly has in this case in my opinion.
As interesting as the controversy is, what is more interesting to me is the reaction of the company. Their official statement can be found online and it makes for interesting reading.
They say basically, ‘our employee didn’t do anything wrong and you can’t prove he did. But, we are now stopping employees from playing our games.’ I’ll come back to this two-sided argument later.
The ‘you can’t prove it’ bit is interesting as they cite that the ‘inadvertent’ posting of information took place at 1:40pm on the day in question, whereas the submitted teams were locked at 1pm. Well… talk about cast iron proof eh?
In rebuttal, I would say that firstly, blog posts are not made contemporaneously, they are crafted on word documents hours or even days before they are posted. Secondly, any inadvertent inclusion of information almost always comes from a sloppy ‘copy and paste’. So where was this employee copy and pasting this confidential information to? For me, it adds up to him having access to the information in plenty of time to formulate his fortune-winning team.
Back to the comments of DraftKing and their attempt to argue both sides of the coin.
In the 1992 film, A Few Good Men, Tom Cruise’s character Lt. Daniel Kaffee put Jack Nicolson’s Col. Nathan R. Jessop on the stand for a final courtroom showdown that lives on in film legend; YOU WANT THE TRUTH? YOU CAN’T HANDLE THE TRUTH!
Colonel Jessop tried to argue that PFC Santiago was in no danger from his fellow marines as he, Jessop, had ordered that he not be harmed – and orders are always followed. He also tried to argue that, just in case, he had arranged to have Santiago transferred to another base.
DraftKing are trying to pull the same trick; we have done nothing wrong, but we’re changing our policy anyway. Seems very slippery to me.
For a multi-billion dollar industry to be unregulated is just asking for trouble. I would be very surprised if this inside player scandal is the only such instance.