DraftKings Forbids Employees From Playing Daily Fantasy Sports Games, Will Open Investigation After FanDuel Scandal

The fantasy sports website DraftKings banned all its employees from participating in any public daily fantasy games for money Wednesday, days after a New York Times report alleged an employee had used insider data to win a cash prize on the rival site FanDuel. Workers affiliated with any other daily fantasy sports contest will be unable to play on DraftKings as well.

The statement read:

As a leader in the Daily Fantasy Sports industry, we take the trust of our community very seriously and remain fiercely committed to the integrity of DraftKings’ Daily Fantasy Sports product.

Effectively immediately, DraftKings employees will be permanently prohibited from participation in any public daily fantasy games for money. We will also prohibit employees from any Daily Fantasy Sports contest operator from participating in games on DraftKings. We are glad to see that others in the industry have followed suit and believe that this is an important next step in retaining the trust of our players.

DraftKings has engaged a legal team from Greenberg Traurig, led by former United States Attorney John Pappalardo, to review our findings and conduct an investigation specific to the allegations against one of our employees. We will release the summary of those findings upon completion.

Furthermore, in order to maximize the integrity of our product and the protection of our players, we have been working with Greenberg Traurig to advise us on ensuring that our policies and practices are second to none.

DraftKings’ explosive growth is a testament to our ability to deepen our fans’ engagement with the sports they love. We are committed to reinforcing the trust and security of our millions of loyal customers.

The story revolves around Ethan Haskell, a DraftKings writer who won $350,000 the day after he accidentally released internal data that showed which players were used most frequently in users' fantasy NFL lineups. DraftKings later said Haskell didn't have the information before he made his lineup on FanDuel, but the overall scenario shook users' trust in the system, which critics likened to insider trading, according to Deadspin.

New York Attorney General Eric Schneiderman said Tuesday he would probe DraftKings and FanDuel in an effort to uncover unfair advantages employees from each company could have, ESPN reported.

DraftKings' Wednesday ban on its employees' playing for money came after FanDuel made a similar announcement. Like DraftKings, FanDuel has hired a former attorney general -- Michael Mukasey -- to look into its internal policies. "Trust with our players is core to our business and has always been our primary concern, so we take any potential game integrity issue very seriously," FanDuel's statement read.