Criminal inquiries into DraftKings Inc., the Boston-based fantasy sports website won’t be pursued by Massachusetts Attorney General Maura Healey, according to a statement the AG made during a Political Happy Hour event.
DraftKings along with industry rival FanDuel came under scrutiny this week when an employee of DraftKings inadvertently released sensitive in-house data and collected $350,000 in a second place win on rival FanDuel’s million-dollar fantasy contest. Allegedly, the data the employee had access to gave him an unfair advantage over other participants.
Healey said that she doesn’t see any problems with the operation, that no federal or state law prohibit DFS sites from operating, and DraftKings customers need not be concerned that they are breaking the law. However, according to the Boston Globe, Healey said that while “we’re not looking to shut them down,” the series of events this week regarding possible insider trading are “concerning.”
Last month Massachusetts joined the growing list of states to review the legality of fantasy sports. Healey, who is a proponent of gambling regulations and is opposed to gambling expansion in the state, said her agency would review DraftKings. The review was initiated by DraftKings, and the AG’s office obliged.
Employees of DraftKings and New York based rival FanDuel Inc. aren’t allowed to play on their own sites, but it had been common practice to enter contests on rival sites. The recent contest win by the DraftKings employee calls into question the issue of fairness surrounding these types of businesses, and Healey appeared sympathetic to users who were “miffed” by the news of the potential slight. Healey said, “I think that those who play want to be, and expect to be, assured a level playing field.” The attorney general reached out to both FanDuel and DraftKings and invited them to discuss safeguards the companies are taking to ensure customers are protected.
FanDuel and DraftKings have both hired law firms so that the companies’ internal controls against fraud can be reviewed.