DraftKings, FanDuel launch third-party review of internal practices, data usage

The daily fantasy sports (DFS) industry remains in full-on crisis management mode following this week’s dramatic escalation of the ‘insider trading’ controversy.

Monday saw DFS operators DraftKings and FanDuel “temporarily” ban staff members from playing on rival DFS sites. The move was intended to dampen the rising furor over concerns that an unknown number of DraftKings staff had access to sensitive data that could offer them an edge over other players.

On Wednesday, FanDuel issued a statement saying it had “permanently banned our employees from playing any daily fantasy games for money, on any site.” FanDuel will also require customers to confirm that they aren’t drawing a paycheck from another DFS site and will block any other company’s staff from playing on FanDuel.

The current controversy began after a DraftKings staffer inadvertently published data showing Week 3 NFL player ownership percentages before all of that week’s games had begun. The same staffer went on to win $350k in FanDuel’s marquee NFL contest, leading many to conclude that he’d used the data to build his team lineups, although DraftKings has stated that the staffer only received this data after FanDuel’s contests had locked.