The New York attorney general began an inquiry Tuesday into the prospect that employees of daily fantasy football sites have won lucrative payouts based on inside information not available to the public, asking two leading companies, DraftKings and FanDuel, for a range of internal data and details on how they prevent fraud.
Word of the inquiry came as the revelation that DraftKings and FanDuel allowed their employees — many with information not available to customers — to play at each other’s sites for large amounts of money continued to rattle the sports world.
Some of the industry’s primary sponsors raised questions or distanced themselves from lucrative advertising and sponsorship deals. On Monday, both companies told The New York Times that they had temporarily prohibited their employees from playing in money games.
Major League Baseball, which owns a stake in DraftKings and has a sponsorship deal with it, said in a statement that it had a policy that “prohibits its own players and employees from participating in fantasy baseball games where money or something of value is at stake, and did not know that the situation was different at DraftKings.”“We have reached out and discussed this matter with them,” it said.
ESPN reduced its association with DraftKings as well. On the network’s “Outside The Lines” show, the host, Bob Ley, announced that while the network will continue to air regular advertisements for the daily fantasy sites, it will no longer run individual segments sponsored by the sites.
The NFL, which recently struck a three-year deal with DraftKings to become a partner of the league’s International Series in Britain, declined to comment.
In a letter to both companies, Attorney General Eric T. Schneiderman demanded the names, job titles and descriptions of any employees who aggregate and compile a wide range of data that perhaps could be used to gain a personal advantage — including ownership percentages and pricing algorithms.
“It’s something we’re taking a look at — fraud is fraud,” Schneiderman said in a radio interview early Tuesday before the inquiry was announced.
Neither DraftKings nor FanDuel would specify how many of their employees competed and won money on other sites.