DraftKings, FanDuel broaden ban on employees playing fantasy sports for cash

DraftKings founders Jason Robins, Paul Liberman, and Matt Kalish (L-R) in the Boston startup's office.
DraftKings founders Jason Robins, Paul Liberman, and Matt Kalish (L-R) in the Boston startup's office.

DraftKings and FanDuel, the two largest daily fantasy sports operators in the US, are cementing their bans on employees playing games for cash.

The new step follows a day of heated questions — some of them from lawmakers and regulators — about the kind of data fantasy sports employees can access when playing high-stakes fantasy sports games on competing websites.

DraftKings, based in Boston, and New York’s FanDuel have long banned their employees from playing fantasy games on their own websites. But it has been a standard practice in the industry to also allow those workers to play games offered by competing companies.

In a statement posted on its website, FanDuel said it has now permanently banned its workers from playing fantasy sports for cash anywhere online. Employees of other fantasy companies also are covered: “We will also require all customers to confirm that they are not an employee of any other third-party fantasy site, and if they are, they will not be allowed to access our site,” it said.

In an interview with Fox Business, DraftKings CEO Jason Robins said his company also was “completely” banning employees from playing fantasy games that are open to the public, regardless of where those games are held. Fox Sports led a $300 million investment in DraftKings in July.

In addition to the games on the two sites that are open to the public, DraftKings and FanDuel also host private, invitation-only games.

Robins said that no matter how many times he assures the public that DraftKings has ironclad policies in place, “It’s still going to always be a question that’s asked.”

“The only real satisfactory answer is just to completely prohibit employees from playing on each others’ sites,” Robins said. “We have never allowed employees to play on any of the public games on DraftKings, and now it’s clear that they shouldn’t be allowed to play in any of the public games on any of the competitors’ sites. So that’s a policy that we’ve put in place.”

DraftKings and FanDuel previously announced a temporary ban on their employees playing fantasy games on other sites.

The two companies have been battling questions about the fairness of employees playing big-money fantasy sports since last week, when a DraftKings employee inadvertently released data about player ownership trends a few hours early.

Both companies and the Fantasy Sports Trade Association have said that there is no evidence of wrongdoing, and noted that the employee in question was not in possession of the data until his games on FanDuel had been “locked,” meaning he could no longer change his fantasy lineups.

The employee in question went on to win $350,000 in a second-place finish on FanDuel that same weekend, which intensified questions about the companies’ data practices.

The two companies each said they would have third-party experts audit their procedures and find any faults. FanDuel said an investigation would be led by former US Attorney General Michael Mukasey, while DraftKings said it had hired a law firm led by former US Attorney John Pappalardo.

“Naturally, people want some some answers and that’s what were trying to do,” Robins said. “They want to know that we’re committed to the integrity of our games. I am fully committed, the company is fully committed, nothing is more important to us.”

Updated 6:46 p.m. with new detail about law firms working with each company.