Daily fantasy betting needs more regulations as industry explodes

If some big shot executive was caught for illegally profiting on a secret of their or another company, they would go to federal prison for insider trading. There are laws that deter insider trading, except in the world of online fantasy sports betting.

You’ve probably seen TV and the internet for FanDuel and DraftKings. These are the two giants of the booming fantasy betting industry. Over just the past two years, these two companies have helped grow the industry into a multi-billion dollar business.

For years, there has been a push to regulate online fantasy sports betting. On these sites, any fan can set up an account and make daily wagers on players or teams. Bets can be as low as a dollar and can quickly skyrocket from there. 

But here’s the flaw: Nothing prevents the employees at these giant companies from betting at a rival’s website. The only thing preventing them from betting at their own company is just policy. 

On Sept. 27, Ethan Haskell a contest manager at DraftKings, finished second at competing company FanDuel’s NFL Sunday Million contest. Haskell would win $350,00. After Haskell’s winning, many questioned if he knew inside information.

FanDuel and DraftKings compile the same statistics for nearly all the same games. The question came up if Haskell used information detailing the percentages of those playing and who they specifically picked, all to help himself make his selections. After investigating, DraftKings says no.

“This employee could not have used the information in question to make decisions about his FanDuel lineup,” said by DraftKings in a written statement. 

The statement says database records indicate that Haskell didn’t access the information before it was released to the public.

Let’s assume everything was fair in this case and it was just a coincidence that Haskell won this prize. 

The bigger question is why are these employees even allowed to make bets on rival websites? 

Major League Baseball said they were surprised that there is no policy against employees betting at other companies.

“We were surprised to learn that DraftKings allowed its employees to participate in daily fantasy games. We have reached out and discussed this matter with them,” MLB said in a statement.

Immediately following this incident, FanDuel banned its employees from participating in other daily fantasy sites. 

Other fantasy sites should follow suit. The optics look bad and any other bad story to come out risks Congress getting involved.

And that’s exactly what should happen next. Laws regulate the gambling in Las Vegas, but exempt online fantasy betting.

The loophole in the law needs to be closed to ensure the playing field is level. 

Billions of dollars and the future of this emerging business are on the line.