Congress Should Act On 'Scandalous' Fantasy Betting: Reid

Arei1 — "There's absolutely scandalous conduct taking place through those programs, fantasy sports," Senate Democratic Leader Harry Reid told reporters Tuesday. Pictured: Reid speaks in Washington, Sept. 10, 2015. Joshua Roberts/Reuters

By Andy Sullivan and Diane Bartz

WASHINGTON (Reuters) -- The top Democrat in the U.S. Senate called on Congress to examine fantasy-sports betting services on Tuesday after reports that an employee with access to insider information placed bets in the unregulated multi-billion-dollar industry.

"There's absolutely scandalous conduct taking place through those programs, fantasy sports," Senate Democratic Leader Harry Reid told reporters.

"I think it also should be a warning-shot to everybody that online gaming is a real scary thing and we ought to look at all of it," said Reid, who is a former Gaming Commission head in Nevada, a hub of the industry.

Reid's statement raises the prospect of congressional scrutiny and possibly new regulations for websites such as DraftKings and FanDuel that have drawn millions of users who pay a fee to compete for daily prizes by assembling teams that accumulate points based on how the players did in actual games.

Meanwhile, Representative Frank Pallone and Senator Bob Menendez, both New Jersey Democrats, asked the Federal Trade Commission to look into the fantasy scandal.

Both companies confirmed on Monday that a DraftKings employee won $350,000 from a $25 entry fee in an American football contest. According to a trade group, the employee inadvertently released player data - a practice that experts liken to insider-trading.

The two privately held companies say they temporarily banned employees from playing daily fantasy sports.

The House of Representatives could hold hearings this fall, said Pallone, the top Democrat on the Energy and Commerce Committee. The Republican-controlled committee is looking into the issue, a spokesman said.