• Federal Prosecutor Investigates Online Fantasy Sports Sites

    Preet Bharara, a federal prosecutor in NY, is investigating whether online fantasy sports sites like DraftKings and FanDuel are violating federal gambling statutes.

    According to a report by Reuters Oct. 21, the investigation is still early.

    Sports fantasy sites have come under heavy criticism recently after it was revealed Oct. 4 that Ethan Haskell, a DraftKings employee, won over $300,000 from a $25 entry in a football contest on FanDuel while allegedly using inside information. (RELATED: Did DraftKings Employee Use Insider Information To Win An Insane Amount of Money?)

    DraftKings spokesman Benjamin Spicehandler said in an email to The Daily Caller News Foundation it can’t comment on any potential investigation.

    Spicehandler continued in the email:

    We strongly believe the games on our site – and daily fantasy sports in general – are legal.

    We recognize our responsibility to the millions of fans who are captivated by the excitement and interactive nature of daily fantasy sports to make sure they can continue to play the game they love.  Ensuring a level and fair playing field for all players is a fundamental tenet of our company, and we are committed to working with all relevant authorities to ensure that our industry operates in a manner that is completely transparent and fair for all consumers.

    We are seeing a number of state regulators and other authorities taking a reasoned and measured approach to the daily fantasy sports business and hope that trend continues along with due consideration for the interests of sports fans across the country who love to play these games.

    TheDCNF reached out to FanDuel for a statement on the pending investigation but the representative had no comment.

    FanDuel and DraftKings are allowed to operate without adhering to federal gambling requirements because of an exemption in the Unlawful Internet Gambling Enforcement Act (UIGEA), the federal statute that regulates online gambling.

    However, the statute explicitly states the “term ‘bet or wager’ does not include participation in any fantasy or simulation sports game…” that meets certain conditions.

    Yet, Nevada, the gambling hub of the country, came to a different legal conclusion.

    The Nevada Gaming Control Board announced Oct. 15 that daily fantasy sports (DFS) “constitutes gambling under Nevada law. More specifically, DFS meets the definition of a game or gambling game pursuant to Chapter 463 of the Nevada Revised Statutes.”

    In addition to the Department of Justice taking aim at these daily fantasy sports sites, Congress is getting involved as well.

    Senate Minority Leader Harry Reid and New Jersey Rep. Frank Pallone Jr. are calling for hearings on FanDuel and DraftKings.

    These one-day fantasy sports sites allow participants to pay an entry fee to draft teams in games played in just one day. The participants then compete against other entrants or against a group in a multi-player contest.

    Follow Steve Ambrose on Twitter

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    Content created by The Daily Caller News Foundation is available without charge to any eligible news publisher that can provide a large audience. For licensing opportunities of our original content, please contact [email protected]

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