FBI Contacting DraftKings Customers As Part Of Daily Fantasy Sports Industry Probe

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Reports from The Wall Street Journal and New York Times confirm that the Federal Bureau of Investigation and the U.S. Department of Justice have opened a probe into the daily fantasy sports industry.

The first rumblings of the FBI investigation came October 13 on Twitter, via a top daily fantasy sports pro:

LSR independently confirmed that players had been contacted by the FBI following the tweet.

What we know so far

According to the Wall Street Journal:

FBI agents from the Boston office have been contacting customers of DraftKings Inc. to ask them about their experiences with the Boston-based company, one person familiar with the matter said.

The scope and targets of the probe are unknown; the WSJ’s sources said the probe was in a “preliminary stage.”

More color from the NYT:

Agents want to know whether employees of DraftKings passed on proprietary information or preyed on players in contests, according to the players. DraftKings, as well as rival FanDuel, have acknowledged that their employees — many of whom regularly rank among the most consistent big winners — have played and won significant money on each other’s sites.


The inquiry, which was started by agents in Boston, is primarily focusing on DraftKings, a Boston-based company, and is also examining whether the site encouraged and accepted deposits and bets from states where the contests are prohibited. The information under review includes a post by […] an executive in charge of developing high-volume fantasy players, on a public thread informing players how to deposit funds and play in contests in states and countries where the games are prohibited.

Last week, a story at GamblingCompliance (subscription) saw the DoJ decline to comment on the topic of the agency’s interest in daily fantasy sports.

Comment from DraftKings

DraftKings commented on the probe in a statement to the WSJ:

“It is entirely predictable that the government would follow up on the misleading reports about our industry,” a DraftKings spokeswoman said in a statement. “We have no knowledge of the specifics of any federal investigation but strongly disagree with any notion that our company has engaged in any illegal activities.”

The comment continues a general trend of DraftKings implying that flawed media coverage of the data leak at the company is the issue driving attention from policymakers and law enforcement, as opposed to the questions regarding DraftKings’ apparently lax attitude toward internal controls that were widely raised in the wake of the leak.

There was no comment (nor is it mentioned if one was requested) from FanDuel. It is also not known if that site is part of the investigation.

DraftKings employee Jonathan Aguiar, listed as a subject of investigation by the New York Timesoffered the following statement via Twitter, responding to his name being used in the NYT report:

Aguiar statement

Not the only problem area for DFS

There are reportedly two other active investigations going on in the U.S. right now:

There has also been increasing talk and action at the state level surrounding the questions of regulation and legality of DFS.

News of the probe comes the same day as revelations that leading daily fantasy sports site FanDuel has retained a high-powered D.C. lobbying firm that also advocates for the Sheldon Adelson-backed ban on regulated online gambling.

Massachusetts part of the equation

According to the WSJ, the attorney general of Massachusetts, Maura Healey, is working with “the companies” — presumably referring only to DraftKings and FanDuel — on “putting in proper consumer protections.” 

Previously, Healey had declared that DFS is legal in the commonwealth. That came after DraftKings requested a review of the company by the AG’s office.

In recent comments in the Boston Globe, Healey previewed the development of such a scheme:

“I think that those who play want to be, and expect to be, assured a level playing field,” Healey said. “I think it’s important to me that that is in place.”

Several other Massachusetts politicians have weighed in on DFS recently. House Speaker Robert DeLeo, speaking in a TV interview, seemed to advocate for taxing DFS operators, saying Massachusetts should “get its fair share.” He was non-committal on the idea of regulation, according to the Lowell Sun:

Asked if there is a role for the Legislature to regulate fantasy sports sites, DeLeo said, “There may be. I can’t answer that.” He said he’s “anxiously awaiting” a report on the topic from Attorney General Maura Healey, who says the sites are not banned under state or federal laws but that she wants to protect consumers who use them.

Massachusetts has also been considering legislation that would allow the lottery to operate DFS.

Following DeLeo’s comments, Senate President Stan Rosenberg said fantasy sports needed to be regulated and taxed. More from MassLive:

“The way I think about it is more like horse racing than any other thing, because you’re basically evaluating the potential for performance and then you’re placing a wager on it,” Rosenberg, D-Amherst, said in a sit-down with State House reporters on Tuesday.

And Gov. Charlie Baker offered a number of thoughts following the news of the data leak:

“I’m really interested in what the attorney general ultimately has to say about this,” Baker said. “She did say that fantasy sports is legal, but there are all kinds of issues around consumer protection and all the rest.”

Baker added, “I would like to see her work on that before I make any decisions or offer any recommendations beyond that. I don’t consider myself to be smart enough about how it works to even understand how that part of the process would work.”

“I do think the consumer protection stuff is important,” Baker said. “And the fact that there was somebody who made $380,000 who worked for DraftKings and had access to information at DraftKings and bet on Fan Duel, I think is a problem.”