The Wall Street Journal (WSJ) has reported that the US Department of Justice has asked the FBI to form a preliminary investigation into US daily fantasy sports (DFS) operators.
WSJ notes that the investigation will focus on US market leaders FanDuel and DraftKings. The Department of Justice is seeking to know whether DFS can be defined as a form of sports betting, outlawed by current US federal laws.
The news sources stated that the FBI had begun to contact customers of DraftKings, with regards to their operations and product services.
As well documented, both DraftKings and FanDuel have hit global news headlines due to data conflict allegations regarding their employees. Both operators have so far been hit with three class-action lawsuits by players regarding customer negligence and false advertising.
“It is entirely predictable that the government would follow up on the misleading reports about our industry,” a DraftKings spokesperson 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.”
Amid increased media, consumer and political scrutiny, FanDuel and DraftKings have undertaken internal investigations of their operations and data policies. US news sources expect the information of the investigations to be published this week.
Although much criticised the DFS operators, have had support from the NFL’s whose Chief Commissioner Roger Goodell stated that the league did not believe there was a direct conflict between fantasy sports operators and its operations.
Furthermore US sports network ESPN lifted its suspension of DraftKings advertising this week, continuing its planned $250 ad-spend partnership.