NFL talks Fantasy Football

Earlier this month, a class action lawsuit has been filed against daily fantasy sports providers DraftKings and FanDuel for insider trading.  The Securities and Exchange Commission defines illegal insider trading as “buying or selling [of] a security, in breach of a fiduciary duty or other relationship of trust and confidence, while in possession of material, nonpublic information about the security.”  So when fantasy football player Adam Johnson filed his lawsuit, he claimed that the companies “had screwed participants by allowing employees with access to inside information to play the games at rival companies.” Essentially employees at DraftKings and FanDuel were able to access company’s databases with the most recent data on every player in every contest and able to use this nonpublic info to make better and higher-scoring line-ups. They would then take this information and use it at their competitor’s website to win money.  It’s been reported that employees at DraftKings have won at least 6 million playing FanDuel. 

With fantasy football being the most popular fantasy sport on both sites, NFL commissioner Roger Goodell has expressed his and the NFL’s concern over the daily fantasy sports controversy. Goodell made a point that since theses leagues are based on picking individual players from different teams and putting them together, that “It is hard to see the influence that it could have on an outcome of a game.” He then states “And it’s not based on the outcome of a game, which is what our biggest concern is with sports betting. So our position continues to be that way. But we recognize some states consider it legal, and some don’t. We’ll follow that law.” Daily fantasy football leagues are legal in all states with the exception of Arizona, Iowa, Washington, Louisiana and Montana.

Both DraftKings and Fanduel have spent millions of dollars on advertisement at NFL stadiums and live television broadcasts. Although the NFL doesn’t directly have any financial ties to these fantasy sports provider, 28 of the 32 NFL teams have either advertising or sponsorship deals with DraftKings or FanDuel. When Goodell was asked if the league would reconsider allowing teams to accept ads or sponsorships from these companies, he responded “Consumer protection and making sure companies operate responsibly is important to us” he then states “We’re going to want to make sure that our fans are protected, the consumers in general are protected, and that we expect anyone that’s involved in any way — whether this is an advertiser or a sponsor or any other relationship — we do that in a responsible fashion. And I hope they will do that.” In general, NFL commissioner Goodell does not believe the scandal will compromise the integrity of the league.