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Posted by on Oct 24, 2015 in Lawsuits |

Daily Fantasy Sports Companies Face Lawsuits

A customer of daily fantasy sports from Kentucky has filed not one but four different lawsuits against both daily fantasy sports companies, Draft Kings and FanDuel. The lawsuit filed claims the customer says he wouldn’t have even played daily fantasy sports if he knew that the employees of the companies and sites were actually playing the game themselves and were also revealing private insider information about the game allowing them to win as much as millions of dollars at the expenses of the customers playing the game also.

Daily Fantasy Sports Lawsuits

Class Action Lawsuit

According to a report by USA Today, the plaintiff, Adam Johnson, filed these lawsuits on behalf of himself and other customers after finding out about the insider in the daily fantasy sports sites using the inside information to win money on the expense of the customers of both sites. The lawsuit was filed in New York and is a class action suit.

1444328099675In fact, an employee of the site, Draft Kings had won $350,000 in a contest on FanDuel during the same week that he ended up leaking the private information that reveals the hottest players to own during that week. Draft King and FanDuel are two rival sites with a similar business model. They allow those interested to play fantasy sports on their site and win money.

Employees Won as Much as $6 Million Playing on Rival Site

According to the lawsuit filed by the plaintiff, Draft King employees have won as much as $6 million playing on the rival fantasy sports site, FanDuel. Not only this but there was an article on the site that stated that FanDuel profiled one of its own employees, who played on the other site and who had won $50,000 on the site in a short amount of time. However, the article has since been taken down off the site which has also been noted in the lawsuit.

The suit also said this:

Plaintiff and the proposed classes would not have deposited money or engaged in any activity on the defendants’ website if they had known that they were competing against individuals with insider knowledge, access and use of non-public data. 

Internal Investigation

Both fantasy sports sites, FanDual and Draft Kings have announced this week that they have hired outside attorneys to look over the inside controls of fraud and have also forbidden employees from playing fantasy games for money. According to both companies, they will be conducting their own internal investigation, reports CBS News.

FBI And U.S. Department Of Justice Investigate Daily Fantasy Sports

Although both sites have now forbidden their employees from playing the games for money, New York Attorney General Eric Schneiderman has asked both sites to turn over their internal investigation they performed about the employee that was playing with insider information. Also, the state of Nevada has ordered that the sites be shut down in the state.

These fantasy sports sites have become more and more popular with both sites using TV and internet ads to bring in new customers every day to play their favorite fantasy sport game for the chance to win some money.

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