DraftKings and FanDuel have recently been in the news as a controversy over daily fantasy sports betting has caused both legislators and authorities to investigate the industry. A recent report highlighted the fact that DraftKings’s CEO Jason Robbins had earlier compared fantasy sports betting to being similar to the casino industry but yet operated in a number of states without a gaming license.
Legislators are now questioning the fact as to how these websites can operate without having a proper gaming license and Nevada has banned both companies from operating.
This controversy has also brought to light the fact that attorney who played a key role in shutting down the online gaming industry during the infamous Black Friday has turned his attention to the daily fantasy sports betting industry.
Many believe that Preet Bharara the U.S. attorney for the Southern District of New York played a key role in shutting down the online gaming industry and cleaning up insider trading. Over the last few years, Bharara has built a reputation for himself and is known as the “The Enforcer of Wall Street“. The controversy over the daily fantasy sports betting industry surfaced after an employee of DraftKings was accused of using insider trading to win a bet at FanDuel. The employee has since then been cleared of these charges as investigators found that there was no law over the daily fantasy sports market that prevented the employee from acting out on the information he obtained via his employment.
However such incidents that cause negative publicity gain the attention of the authorities and attorneys like Bharara. Amaya Inc has already decided to pull its daily fantasy sports betting website StarsDraft from a number of states just to be safe and not give any cause for the authorities to ban the website and start another investigation.
DraftKings and FanDuel who dominated 90% of the daily fantasy sports betting website will have to be prepared to fight against legislators who are now looking to ban these websites and impose stronger regulation on the market.
DraftKings released a statement which said
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. 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
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