US attorney Preet Bharara, famed prosecutor of illegal gaming, has launched a daily fantasy sports investigation of the industry to see whether or not they are in violation of US gambling laws.
Bharara is infamous for taking down the founders of the biggest online poker sites in US in the 2011 Black Friday indictments. He has now set his sights on daily fantasy sports (DFS) operators DraftKings and FanDuel to see if they are violating federal law. News of his daily fantasy sports investigation follows the news that the FBI and US Department of Justice (DOJ) is also looking into the legality of the DFS industry (/gamblingnews/fbi-investigating-fantasy-sports-operators-8502); however, while the DOJ remains indecisive, should Bharara discover a violation of New York law it would be enough to invoke the federal illegal Gambling Business Act.
Bharara’s involvement is yet another addition to the ongoing controversy surrounding the DFS industry. It will only increase the media coverage of US gambling news and place more pressure on politicians to impose regulations on fantasy sports. Fighting against this, the DFS industry executives continue to claim that DFS isn’t illegal gambling because it’s a skill game.
DFS operators hire help to fight daily fantasy sports investigation, NCAA gets involved
The daily fantasy sports investigation has high risks for both the operators and their players. Online gaming consultant Lawrence Walters says that should a criminal case be made, players who like to bet on sports in US could have their DFS account funds frozen. To make sure this doesn’t happen, DraftKings has hired lobbyists Gary Slaiman, Matt Miner, and Gary Gallant, and former attorney general Martha Coakley as a consultant.
In the midst of the daily fantasy sports investigation, the NCAA has asked DFS operators to look into whether its referees played with real money on DFS sites. It has already banned its players from DFS gambling, and is now trying to ban its referees and game officials as well. In addition, it won’t allow DFS advertising related to the NCAA, and has asked both DraftKings and FanDuel to stop offering NCAA contests because it believes that DFS “should not be offered in the college space for a variety of reasons.”