Fantasy Sports

Fantasy Sports League Employee Win Prompts Class Action Suit

Accused of misrepresenting fairness of competition

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You know who this guy is? He's not you. That's who he is.
FanDuel

It was probably destined to happen. The news that employees at major fantasy sports league companies also continued to compete for winnings at other sites (and the possibility of access to inside information) has prompted a class action lawsuit.

ESPN is reporting that DraftKings and FanDuel (if you don't know who they are, turn on your television to any sports network for about five minutes) are being accused of negligence, fraud, and false advertising by a player with a $100 account at DraftKings:

The suit claims that daily fantasy games put forth by the two companies are misrepresented as fair. That case is made mainly through the recently revealed policies of the two companies that allowed employees to enter contests on the other's site for cash prizes, along with the rest of the population.

"DraftKings performs analytics to determine winning strategies, return on investment of certain strategies and even how lineups on FanDuel would do if they were entered into DraftKings contests," the suit alleges.

With these strategies potentially available to some employees, those employees could have a potential advantage by playing on a competitor's site.

A spokesperson for FanDuel said that employees from DraftKings had won .3 percent of FanDuel's cash prizes. That percentage appears small, but adds up to $6 million given the huge prize pools these companies are boasting.

The sites have said they're both going to permanently ban their employees from competing in other fantasy sports leagues, and they've hired third-party employees to investigate and evaluate their own practices.

Actual fraud problem or just the growing pains of a young industry that blew up so fast it hadn't previously had to really examine these sorts of practices? I guess it's a court matter now.

There are some (actually, more than "some") who have argued that the problem is that the fantasy sports league business is not regulated by the federal government. A couple of days ago I explained how that claim is simply not true. The Federal Trade Commission has the authority to intervene in any sort of fraudulent behavior or anti-competitive business practices by these companies.

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  1. I’m impressed that the NFL has found a way to directly monetize their viewership while making their games even harder to watch.

  2. Actual fraud problem or just the growing pains of a young industry that blew up so fast it hadn’t previously had to really examine these sorts of practices?

    I think this is being blown out of proportion a good bit but it really is pretty retarded that they didn’t already have a ban on their employees participating. It seems so damn obvious that the optics are bad when people are trusting you with their money.

    1. “…but it really is pretty retarded that they didn’t already have a ban on their employees participating. It seems so damn obvious that the optics are bad when people are trusting you with their money.”

      This.
      They ought to be sued for public stupidity.

    2. I’d like to see the 0.3% figure put in perspective. The employees won 1 of every $300 paid out. But how much are they putting on the line? I’m gonna guess it’s much less than 0.3% of all “wagers” (for lack of a better word).

      I’m not saying the numbers should line up exactly. If you work for FanDuel, you probably know a lot more about football than I do, and odds are you’re gonna beat my dumb ass nine times out of ten. But still, bottom line, I think this issue could be worse than the 0.3% figure suggests.

    3. Thing is they were banned from participating at their own site.

      What they were not banned from doing was participating at competing sites and I think it is rather questionable that they should be.

      Should a casino bar it’s employees from gambling at OTHER casino’s?

      Now what is surprising is that each did not have a ban on players employed by the competition playing there.

      The other issue here is I seriously question why Draft Kings has analytics showing how various strategies would perform at Fan Duel. I can see absolutely no legitimate reason for them to have allowed that software to be written and so I can see some questionable at best activity here.

      1. Your casino example isn’t really comparable. For one thing, I don’t think many casino’s ban their employees from playing on site. Also, this employee had an amazing amount of information regarding fantasy teams in order to create the “best” team on the other site. There really isn’t anything comparable in, say, Texas Hold’em.

    4. Both companies had bans on their employees participating in league on their respective sites. Draft Kings employees couldn’t play in Draft Kings league, and so on. Are Bally’s blackjack dealers banned from playing cards in Foxwoods casinos?

      1. Not comparable at all,though.

    5. It does not bother me that they did not have those bans in place previously. There really is no advantage that these employees have that I could not get myself. They may have access to an algorithm that I do not, but I could still write the same algorithm (or maybe one better). These people are all betting on future events. There is no information in all the world that could determine if Tom Brady is going to break a leg in the first quarter. IMO, this “scandal” is no different than a poker dealer at one casino going to another casino as a player. The real disadvantage to the average player is the “professional” gamblers that have the time to study all the analytics, and the funds to play hundreds of times a day (increasing their odds of winning).

  3. Those commercials are so fucking obnoxious.

    Also anyone who thinks these games are “fair” are complete idiots.

    1. You can say that again.

    2. Please explain why you believe these sites to not be “fair”. Everyone plays by the same rules. Even if someone had “inside information”, it is still information that you could find yourself. And as I posted elsewhere, even if I had access to “inside information” that said Tom Brady is going to throw for 1,000 yds and 10 TD’s, there is no information anywhere that says if he will break his leg in the first quarter.

      1. He has no idea what he’s talking about, and he may be Tulpa.

        I’m just sayin’.

        1. I had a friend that used to tell my that Texas Hold’em was rigged and going to Vegas was a waste of time. No matter how many times I explained what a “rake” was and that one was playing the other players and not the House, he would invariably say I was the fool.

  4. Those commercials are so fucking obnoxious.

    Also anyone who thinks these games are “fair” are complete idiots.

    1. brokencycle? More like brokenrecord.

  5. “A spokesperson for FanDuel said that employees from DraftKings had won .3 percent of FanDuel’s cash prizes. That percentage appears small, but adds up to $6 million given the huge prize pools these companies are boasting.”

    I still don’t understand what they mean by that.

    Do they mean 0.3% of the sweepstakes games FanDuel offers directly?

    Or do they mean 0.3% of all the fantasy games individuals play against each other?

    “DraftKings performs analytics to determine winning strategies, return on investment of certain strategies and even how lineups on FanDuel would do if they were entered into DraftKings contests

    For those who haven’t played, you don’t get to see your opponent’s lineup in a one-on-one game until the first game of the week actually starts–and the lineups are locked.

    If employees at one site are able to see the lineups on another site, then winning the sweepstakes is the least of my concerns. If I could see the lineups of other players before the game started, I could clean up. I could just put my money up against the newbies and the suckers and clean up.

    That isn’t fair to newbies. That isn’t fair to other veterans either.

    1. Who cares about the sweepstakes that the site is offering itself? Are the employees of FanDuel or DraftKings given access to see the lineups of one-on-one games at FanDuel? If they are, then the cards are stacked against you.

      Whether the government needs to get involved is another question entirely, and regardless of what you think about that, we need to get the information straight…

      Is someone being given access to lineups in one-on-one games before the lineups are locked or aren’t they?

      1. No, and nothing implied that either.

        1. Nothing implied that?

          I’m not the only one who thinks that was implied…

          “There’s no reason why an employee of any daily fantasy site should be able to view a customer’s fantasy sports lineup prior to the start of a contest unless trying to fix a customer complaint. Any query to a database with the intention of viewing this data should be logged and linked to a logical explanation for why it occurred. Only a select few employees at a daily fantasy site should have this authority in the first place.”

          http://www.wsj.com/articles/i-…..1444171886

  6. I still don’t get the whole “fantasy sports” thing. I’ve never played in an NCAA tournament pool, which seems like the spawning pool for all this shit, since every office in the US was mandated by law to have a pool every spring.

    I’ll bet there’s a Fantasy Rugby League out there, isn’t there? No, I’m not interested in that, either.

    The fact that there’s millions of dollars to be made from this eludes me even more. To my loss, I’m sure.

    As Triv says, I no longer understand the world I live in….

    AND GET OFF MY LAWN!!!

    *shakes cane at young whippernsnappers*

    1. “I’ll bet there’s a Fantasy Rugby League out there, isn’t there?”

      There is one….in my mind.

      1. One of my daughters and my son played rugby. Son in law still does. Great fucking sport. Wish I’d known about it when I was in HS – I’d have played.

        Now – too old for the contact, am I .

    2. There also must be the ‘house cut’, which means it is impossible to come out even in the long term.

      1. Not at all.

        If I’m getting a 98% return on my money, how does that mean I can’t come out even in the long term?

      2. Not if you are sufficiently better at analysis of the abilities of the athletes than the other participants in the Fantasy Sport betting. “Sufficiently” meaning that your ability is better than average at a rate better than the house spread.

        1. Especially if you diversify your competition.

          If you have $100 to bet, you don’t bet $100 in one one-on-one game.

          You bet $5 against 20 different one-on-one games.

          You win 75% of them, and you’re making a nice return.

          I’ve won or come in second in my anonymous fantasy leagues, must be five or six years in a row, now.

          I’ve done the same in fantasy hockey.

          Yeah, barring injury, I can beat more than 50% of the people I play against one-on-one.

          I can make money in the stock market, too.

    3. @ Almanian’s Rusty Woodchipper

      The first requirement of participating in the Fantasy Sports betting is that you have to actually care about professional sport.

      I don’t care about professional sport. I can’t name more than a few teams in any league.

      1. Playing fantasy can make you care about things you didn’t care about before.

        Some of the most exciting football games I’ve watched in recent years were between teams I wouldn’t have given a fig about otherwise.

      2. Yeah, this. I don’t get the whole sports thing, much less the fantasy sports thing.

      3. I like some professional sports – less than I used to. But even when I gave a shit about watching the NCCA Final Four (I no longer do) I didn’t want to play a stupid side game guessing who was going to win so I could get $60 and buy drinks for everyone at the bar.

        Fantasy Football completely eludes me, and football is the one TV sport I still watch religiously (aside from all car/motorcycle racing, which may or may not be a “sport” depending on your view of things).

        I dunno. I just don’t get it.

        Of course, I don’t gamble, either. Not because I think it’s immoral or something – it just bores me to no end. Never understood the appeal. I liked visiting Vegas for the opportunity to go visit my uncle in Pahrump.

    4. I saw an old meme somewhere that I kinda liked:

      Fantasy sports is D&D for jocks.

      1. I am stealing that.

        1. Do a Google image search on it, you’ll get some hilarious hits.

          “I put boots of elvenkind on my defensive end so the enemy quarterback wouldn’t hear him coming”

          1. A Cloak of Shielding for my receiver so the DB didn’t see him until he’d already scored.

            PWND

          2. With the stadium noise, the QB can’t hear him coming anyways. What the DE needs is a ring of invisibility, boots of speed, or gauntlets of strength.

            Fucking noobs.

            1. You’re better off investing in gloves of missile snaring for your corners and safeties. Intercept every damn pass he throws.

      2. How much money can you make playing D&D?

        1. Like will fantasy sports, it depends on where you play.

        2. Loads. But it is in elven tender.

          1. So, lambas?

            1. No, the one cute chic at the convention in the sexy elf costume.

              1. Who as we all know is actually a prostitute, not an actual gamer.

                1. Who as we all know is actually a clever prostitute, not an actual gamer.

                  credit where credit is due, TLAH!

        3. That I know of none because there really isn’t any way to make it competitive

          However you can make some pretty big coin playing Magic the Gathering…

          http://magic.wizards.com/en/ev…..ge/alltime

          1. Several conventions have competitive events. The reward for those is usually game material and not cash though.

    5. every office in the US was mandated by law to have a pool every spring.

      I would have guessed football. Could be a regional thing.

      1. Super Bowl “squares” betting appears to be somewhat mandatory in the US.

    6. I have some bad news for you. Your rusty woodchopper drink had cherries in it. CHERRIES!!!

      1. P.S. Steve Smith was there. But I got there too late for an introduction.

        1. Where did you guys end up eating?

          1. BTW, where did you go? I thought you were coming with us.

            I had no idea I was drinking almost straight bourbon, so I’m not really sure what was going on at that point.

            1. I was beat. I was going to fall asleep on my feet if I stayed any longer. But I got Taco Bell on the way home, so it all worked out.

      2. ur doin it wrong!

        Two shots of Stoli. Chocolate milk to taste.

        Enjoy your Rusty Woodchipper!

        GLAD YOU GOT SEE STEVE SMITH. TOO BAD TOO LATE FOR GET RAPE.

        1. STEVE SMITH HOPING FOR INTRODUCTORY RAPE OF MANY REASON REGULARS!

  7. Scenarios like this are fantastic examples of how markets will do a much better job of regulation than any government overseer; the slightest whiff of scandal, like this, will send customers packing. Their business depends very much on seeming more fair and neutral than Caesar’s wife. But once people think the government will protect them and ensure a level playing field, that market feedback goes out the window.

  8. Nothing says “justice” like lawyers making millions and users getting drafted into the suit unless they opt out for $4.35 in credit.

    1. Hey, it’s either this or a ban on for-profit fantasy leagues. This is the American way. Where else is online poker banned beyond North Korea and the Land of the Free?

      1. It’s actually legal in New Jersey.

        1. VPN ghost says it’s legal everywhere.

          1. It’s also possible to watch South Korean TV in North Korea, if you’re brave enough and know a bit about TV sets.

          2. I was referring to online poker.

        2. And if you’re a NJ resident can you play poker with someone from Canada or Russia? I actually don’t know how it works. If only NJ residents are allowed to play, then it’s too small.

          1. Yeah NJ residents only.

            1. I just love that every testimonial in BetFair’s commercial looks like a degenerate gambler.

    2. I actually work in class action law (not for or as a class action attorney, though).

      Class action law is 0% about bringing restitution to the wronged, and 100% about generating huge bonuses for lawyers.

  9. There are some (actually, more than “some”) who have argued that the problem is that the fantasy sports league business is not regulated by the federal government.

    You have to parse envy-monger speak. When they say “unregulated” they don’t mean “isn’t regulated”. They mean “hasn’t come under extra scrutiny from the government, to the point where they will hopefully be extorted and/or fined”. And the reason they’re talking about it is to cause just that. To them, “regulation” means “the government is now watching you like a hawk with the intention of squeezing every last dime it can out of you if the slightest opportunity presents itself”.

    This makes them happy, because they see someone else making a bunch of money and it drives them nuts. So if the big dog comes in and fucks that up some, their envy is partially mollified and now they are happier. It’s pretty disgusting.

    1. Dude, you don’t understand! Government is the people, while those businesses are the enemy! Businesses steal money from workers and customers! That’s what profits are! When the government extorts money from businesses, it is actually reclaiming money that was stolen from the people! And since government is the people, that money actually goes into your pocket since you’re one of the people! You should celebrate when the government loots a business, since the money is going to you!

      1. That’s pretty good!

        But us left-leaning libertarians (And the entire spectrum of liberals) don’t simple profits (Revenue-Expense) as theft.

        There are practices that business people do that are fraudulent or sketchy and yes, we call that theft..

        1. don’t [equate?] simple profits (Revenue-Expense) as theft.

          Then why is it taxed?

          1. Is theft normally assumed to be taxed?

            Gotta tax something, I guess.

            1. We have property taxes (local), sales taxes (state), and import/export taxes (federal). Why is income taxed, if not out of a belief that the rich and/or corporations are committing some kind of misdeed by making money?

  10. I’m a quant strategist on the street.
    I work on certain asset classes and sectors and do no analytical or research work on any specific issue or stock or company.

    My trading activity is monitored. There’s a Chinese Wall. There’s a restricted and block list of issues/stocks/companies i can’t trade in.

    I think this practice is proper.

    Even employees of the State Lottery (with practically no chance of insider information gathering) can’t play the lottery.

    It was bad judgement to let sports quantitative strategy employees play anywhere.

    1. I think this practice is proper.

      And the exchanges have every right to enforce it. What does this have to do with the government?

    2. I will gladly make any plays deemed profitable by any employee

      . either company and split the profits with them.

      Regulate that shit.

  11. “I put in thirty five dollars, and won two million; and you can, too!”

    Anybody dumb enough to believe this deserves what he gets.

    1. I.E., Keynesians.

      MUH MULTIPLIER!

      1. heh!

    2. He won a $2 million sweepstakes game against a million other people.

      People win more than that with a $1 lottery ticket every day.

      1. Ken, why are you getting a sandy vagina over this? Are you upset that people are picking on your favorite pastime?

        1. Setting the record straight!

          Those survivor sweepstakes are like winning the lottery. And picking non-obvious players to beat the tens of thousands of other teams is like winning the lottery, too.

          You’re not going to make $2,000,000 betting $20 games every week.

          But he won that–in a sweepstakes with a $2,000,000 prize.

          I have no problem with the suggestion that people make tens of thousands a year and that pros and bookies make in the six figures doing it full time.

          People do it. People make a living playing poker, too.

          And somebody wins the lottery every day. Winning the lottery doesn’t mean you’ll win at poker. Poker is a skill game, which is why some of the same people tend to land at the last table over and over again. No one should look at that guy winning the lottery like it means they’ll win the skill game at FanDuel.

          And it doesn’t mean that winning week in week out at FanDuel isn’t a skill game either.

          1. I don’t think anyone really cares about the straightness of the record. But you keep on that wagon and set all the nerds and geeks in their place.

            1. If they’re going to argue against regulating FanDuel, it might help to be able to tell its head from its ass.

      2. Not in Illinois…

        “You too can win an IOU from the Illinois Lottery!!!!!”

        1. Wait, what?

          1. Read and despair for those of us in “the Land of Lincoln”

            http://www.chicagotribune.com/…..story.html

      3. *notes Ken Shultz doesn’t know any girls – NTTAWWT*

        1. If you rock Saturdays/Saturday nights, it makes the long goodbye on Sunday morning that much easier.

          Although the hello again on Sunday night never seems to sit well.

    3. If a million people put in $35, someone may win $2 million.

      The question is: Who gets the other $33 million?

        1. Sweet gig.

          *runs off to start my own gambling website*

      1. He put in $35, and they gave him a free entry into a sweepstakes game.

        I swear, like talking to people that are new to the internet or something! No, it’s not that the interwebs are pre-installed on the computers; it’s just that AOL’s software came preinstalled. And, no, AOL’s website is not the full extent of the internet. There are other websites, too!

        I love you guys, and I wouldn’t mind if you guys were making public policy, since I know you guys would default to the government keeping its hands off. But, Jesus, there are millions of people out there right now taking firm positions on whether FanDuel should be regulated–and they know even less about it than you guys do!

        This is why everyone should mind their own business. My God damn, angry fellow Americans want to make rules I gotta live by–and they have no idea what they’re talking about! Yeah, the commercial is confusing, but the guy didn’t make $2,000,000 in weekly leagues by putting in $35. The huge $2 million check is a dead giveaway. It was a sweepstakes they entered him into for joining. He probably lost his $35 in weekly play.

        1. Deep breath there, Ken.

          Some of us are just having some snarky fun…this is HyR still, yes?

          1. Obviously this is more important to me than it is to other people who haven’t played for years.

            Yeah, I play, I win, I enjoy the hell out of it, I take it seriously…

            And I was being snarky, too.

          2. Obviously this is more important to me than it is to other people who haven’t played for years.

            Yeah, I play, I win, I enjoy the hell out of it, I take it seriously…

            And I was being snarky, too.

        2. My God damn, angry fellow Americans want to make rules I gotta live by–and they have no idea what they’re talking about!

          Well, yeah. The whole essence of government is idiots with guns telling experts how to do their job.

          1. Yeah, it’s the same thing when they want to regulate the banks, the stock market, and reform the healthcare system, too.

            It’s all bullshit.

            What makes us all qualified to weigh in on these things is because we’re experts on our own qualitative preferences–and that’s an extremely important observation. No PhD knows what you want better than you do.

            It’s using the government to impose their own qualitative preferences that’s the problem. That, and assuming that they understand an issue well enough to make laws regulating it. For every “climate change denier” out there on the right, there have to be ten people on the left who know even less about how the stock market works, how the banking system works, how the healthcare industry works, and how FanDuel works than your average redneck knows about climatology*.

            Someday they’re going to come after my motorcycle because of what they think they know about the science, when all they’ll really be doing is using the government to impose their own qualitative preferences on me–without any real understanding of the “science” anyway. It’s enough to make you wanna pull your hair out.

            *Incidentally, I met a redneck over the summer who is living off the grid and knows a hell of a lot more about alternative energy than your average Whole Foods progressive. And I know a lot of Whole Foods progressives!

            1. Recite the Serenity Prayer.

  12. I think Ken’s mad because I called his gambling problem D&D.

    1. I’ve still got a 30 sided die around somewhere.

  13. I don’t get it. The problem is that FanDuel uses its database to predict the true odds at DraftKings (not to be confused with RealityKings)? And with this information, and the fact that they read NFL injury reports for a living, they do much better than a typical fan?

    The valuable inside information is knowing how everyone else is setting their lineups so you can take a contrary position?

    1. If your lineup has low owned players that puts up crooked numbers, your odds of winning go up, because not many people have those players.

      You obviously need the other players in your team to also put up great numbers. I usually punt the C and SS position and it’s not unusual for the backup catcher to hit fluke 3 run bombs. But that’s all in vain if my high priced third baseman grounds out thrice and one of my starters gets shelled.

      The sharks will spread around lineups with the same core players and differentiate them with scrubs or low own players.

  14. The more I think about it, you might be able to optimize over several scenarios so that you put money on multiple lineups that are underrepresented in the database of entries.

  15. to win the large challenges one MUST have the “sleeper” the guys nobody has that has a huge game….anybody can figure out which players are going to be in most of the lineups, it is that guy that nobody has again having a huge game that wins……..there was no scandal here, the guy had no more info than any person willing to look into it could have had……also you can have the “perfect” lineup based on stats and and then have 3 guys injured in the first quarter.

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