FBI investigation into DFS launched
News on 15 Oct 2015
News on 15 Oct 2015
In a story first broken by the Wall Street Journal Wednesday, US media are reporting that the FBI has commenced an investigation into the “insider” scandal at daily fantasy sports operator DraftKings following appeals by politicians for a Department of Justice and Federal Trade Commission enquiry (see previous reports).
The reports indicate that FBI agents have begun contacting DraftKings players and asking them about their interactions with the daily fantasy sports betting company.
The Journal speculated that the investigation will be wider than the “insider” scandal, and will also study the overall legality of DFS in terms of the fantasy sports carve-out in the 2006 Unlawful Internet Gambling Enforcement Act, which author and now retired Congressman Jim Leach says never envisaged today’s situation with the genre.
The intervention by the FBI is the latest development in a furore that erupted just two weeks ago but has attracted massive mainstream media coverage and the attention of enforcement and political figures calling for Congressional hearings, a Grand Jury in Florida and criminal investigations by the FBI and FTC, whilst DFS market leaders DraftKings and FanDuel continue to protest that there has been no evidence of wrongdoing.
The Washington DC publication Politico revealed this week that the lobbying firm hired by DraftKings, FanDuel and the Fantasy Sports Trade Association is Steptoe and Johnson, which Our readers may recall is also the lobbying agency for Sheldon Adelson’s Coalition to Stop Internet Gambling.
The National Football League appears to be concerned about its amicable relationship with daily fantasy sports, too; according to some reports, the league’s Washington DC office has been contacting House Energy and Commerce Committee members in an attempt to stall a Congressional hearing requested by politicians like Rep. Frank Pallone .
Pallone reacted to the league’s activities by saying this week that the NFL had taken a “hypocritical” position on DFS and sports betting, making it all the more necessary for Congress to closely examine the genre.
Finally, a third class action has been filed on DraftKings and FanDuel, this one in Louisiana, one of the five states where DFS is specifically illegal. The action was filed by lawyers representing New Orleans resident Artem Genchanok. Previous actions have been filed in Massachusetts and Kentucky .
