As of recent, daily fantasy sports providers such as FanDuel and DraftKings have been under public scrutiny after several lawsuits have been filed against them. These lawsuits claim that employees of FanDuel and DraftKings used nonpublic information in order to create a more profitable fantasy line-up and used the line-up at their competitors website. This is what is known as "Insider Trading" and so far DraftKings employees have won more than 6 million dollars by doing this. It's safe to say there will probably be more lawsuits filed against these multi-billion dollar corporations, but the real question is how will they regain the fantasy player's trust?
Well according to an article in the Wall Street Journal, these fantasy sports providers plan on creating an outside control board known as the Fantasy Sports Control Agency to ensure ethical behavior in the industry. This control board is led by former Obama administration official, lawyer Seth Harris, (Deputy Labor Secretary from 2009-2014). Mr. Harris explains "We’re going to develop a set of industry standards,” by "ask[ing] all of the companies that are engaged in cash games to establish
controls, processes, and leadership that will ensure compliance with
those standards." Even DraftKings Chief Executive Officer Jason Robins agreed that this new control agency “will help our industry establish best practices” and will give a level playing field for customers.
So what would happen if these companies or their employees were caught cheating again? Mr. Harris said they would have strict controls such as audits and an enforcement mechanism to deal with misconduct. Depending on the severity of misconduct, legal actions may be used as well. The creation of this control agency wouldn’t affect the continuing investigation of the insider trading lawsuits filed against the companies, but it is the right step in moving forward for these companies and maintaining a healthy relationship with their customers.
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