In what appears to be an effort to ward off strict oversight from the governments of individual states and federal agencies, operators of daily fantasy sports have created a new self-regulatory body. Seth Harris (pictured) former United States Secretary of Labor, announced on Tuesday that he was in charge of leading the new agency, titled Fantasy Sports Control Agency (FSCA). The group was created by the Fantasy Sports Trade Association (FSTA) to create “a strict, transparent and effective system of self-regulation”
The FSTA represents over 300 companies in the fantasy sports industry.
Speaking with Bloomberg News, Harris stated that he was asked by the FSTA to become involved, to ensure that the group is not a sham, a fake, or publicity stunt to truly look into the integrity and ethics of the industry. According to Harris, his agency will be independent and not under the control of the FSTA, which counts among its board members executives of FanDuel and DraftKings – the two top grossing daily fantasy sports companies.
There are currently several investigations on a state and federal level taking place in regards to the daily fantasy sports industry. The legality of the industry is in question after a data leak controversy took place involving DraftKings in early October. Since the news of the data leak broke, several politicians have been asking for an increase in oversight of the industry, which is currently unregulated. Perhaps coincidentally, the state of Nevada swiftly ruled that DFS operators must have a gambling license to operate in the state, shutting down such sites as FanDuel and DraftKings until licensing can be obtained.
The FSCA will be focusing on four areas when monitoring daily fantasy sports:
- Internal Company Controls and Processes
- Auditing Policies
Members of the FSCA will be subject to penalties, which have yet be disclosed, if they step outside the guidelines. The goal of the group is to prevent and preempt violations that will be a threat to player funds, the integrity of the operators or gaming reputations, as well as yo determine if there are large numbers of violations already taken place.