New York’s attorney general is investigating both FanDuel and DraftKings fantasy sports sites after allegations of insider trading surfaced.
Authorities are investigating after it was revealed that employees of the two highly promoted website were using information to play on each others’ website, winning hundreds of thousands of dollars in prize money. Both sites announced that they had barred insider playing after the information became public.
ESPN, who owns part of DraftKings, said it would still run ads for the service but had pulled sponsored segments on its network from the company.
Attorney General Eric T. Schneiderman sent a letter to both companies demanding to know the names and titles of the employees involved in the insider transactions.
DraftKings released a statement noting, “We have just received and reviewed the letter from the N.Y. attorney general, and the company will fully cooperate with the inquiry.”
Congress is also reportedly interested in probing the sites, who are exempt from traditional laws covering gambling.