DraftKings, FanDuel Under FBI Investigation

Daily Fantasy Sports (DFS) companies found themselves in hot water after it was revealed that the Federal Bureau of Investigation had launched investigation designed to determine whether these websites run gambling operations and thus violate federal law.

According to the Wall Street Journal, FBI agents have contacted a number of DraftKings customers to enquire about their dealings with one of world’s leading DFS firms.

Should Daily Fantasy Sports be Banned?

These efforts coincide with an ongoing debate in the US Department of Justice whether daily fantasy sports websites should remain exempt from the 2006 Unlawful Internet Gambling Enforcement Act (UIGEA).

It would appear that DFS operators have taken advantage of the federal ban on gambling to offer customers around the country what is clearly another type of gambling, due to the fact that their players stake money on their predictions and stand to earn hefty payouts if they do better than fellow gamers.

The two leading fantasy sports operators, DraftKings and FanDuel, came under fire not so long ago as it was revealed that a DraftKings employee had mishandled in-house data to win $350,000 playing on FanDuel.

Having again found themselves under the spotlight for all the wrong reasons, the DFS websites will now have to prove their business dealings to not violate the UIGEA.

DFS Websites Facing Charges

New York Attorney General has ordered DraftKings and FanDuel to give their response on the number of data handling allegations, whereas they are also under investigation in Florida for possible violations of the Illegal Gambling Business Act.

Louisiana is another state where DFS firms could find themselves in all sorts of problems, with a class action suit having been filed against the two companies.

Namely, Artem Genchanok from New Orleans, is adamant that he has uploaded funds and spent some time playing at DraftKings and FanDuel in spite of the fact that the two companies claim to block Louisiana residents from playing at their sites.

Having come under increased scrutiny for their business dealings in the United States, FanDuel has reportedly employed lobbying firm Steptoe & Johnson to help maintain status quo and ensure the site is not banned from continuing to offer their services to US customers.