Oh good, Senator Harry Reid (D – Nev.) is weighing in on the daily fantasy sports (DFS) “insider trading” scandal. According to NewJersey.com’s John Brennan, the Senate Minority Leader spoke with his colleague, Herb Jackson, to give his two cents on the issue that has been gaining more and more attention in the past week.
To quickly review, Ethan Haskell, written content manager at the industry’s leading DFS site, DraftKings, posted a list on the site’s blog of the usage percentages of NFL players for the contests corresponding to the NFL’s Week 3. These percentages showed the frequency with which players could be found in DFS participants’ lineups that week. Based on the timing of his post, though, suspicion arose in the DFS community that he may have had access to this information before rosters locked. This suspicion was compounded by the fact that Haskell ended up winning $350,000 on rival FanDuel that same week, making it look like he may have used that information to help him construct a winning roster.
DraftKings has since released a statement saying that it has conducted an investigation and found that Haskell did not have access to the player data until 40 minutes after rosters had locked, so in the company’s view, he did nothing inappropriate. FanDuel has also said that nothing seems out of order.
Even if everything is ok, though, it still looks bad and raises questions as to what sort of access to data employees of the DFS sites have. Information has also come out that Haskell isn’t the only DFS employee who has won big at other sites (employees of DraftKings and FanDuel were not allowed to play on their own sites and since this came out, the companies have changed the policy to prohibit employees from playing for money on any fantasy site) which adds to the eyebrow raising and thoughts of “insider trading” of valuable player information.
Enter Harry Reid. Speaking to Jackson, Reid said (likely wringing his hands):
They even advertise on TV about the multi-million dollar wins that people can get and have had. And we learned yesterday in a nice piece written in the New York Times and other places that it is absolute scandalous conduct taking place at those programs, fantasy sports. Some of the owners of those programs know what’s going on in their competitors [contests] and so they can make a lot of money – and that’s what they’ve done.
So the answer is yes [to Congressional scrutiny] and I think it also should be a warning shot to everybody that online gaming is a real scary thing and we’d better look at all of it.
Of course, he is inaccurate on his statement that “it is absolute scandalous conduct taking place at those programs, fantasy sports,” as there has been nothing at all proven (and if we are to believe DraftKings’ conclusions, Haskell did nothing wrong at all), but Harry Reid doesn’t worry about facts. That is not to say that there definitely isn’t anything improper going on at any of the DFS sites – after all, we saw what happened at UltimateBet and Absolute Poker – but right now, it is all just something “possibly” and “maybe” and “could have” happened.
Let’s remember that Harry Reid was once a champion for online poker, having tried – and miserably failed – to introduce pro-poker legislation in the Senate. But in December, he made an about-face, saying he would do what he could to stop the spread of online gambling and would support Sheldon Adelson’s Restoration of America’s Wire Act (RAWA). All of a sudden, after fighting for online poker, he changed his mind, saying, “I think the proliferation of gambling on the Internet is not good for our country. I think it is an invitation to crime. I think it is hard to control for crime when you’ve got brick-and-mortar places, let alone something up in the sky someplace, and it is very bad for children.”
The prevailing opinion on why he had a change of heart was that it was for political reasons. Sheldon Adelson, who Reid says is a good friend, donates millions upon millions of dollars to Republican political candidates. When running for re-election next year, Reid may face a tough competitor in Nevada Governor Brian Sandoval. It is thought that in exchange for Reid’s support on RAWA, Adelson would not financially back Sandoval.
