Both FanDuel and DraftKings have been in the news lately for allegedly being involved in insider trading. There have been numerous players that have gained thousands of dollars who were also employees of both companies. On top of the mounting scrutiny over daily fantasy leagues, this type of collusion is starting to bring questions on the legality and functionality of both companies.
Now Sports Illustrated is reporting that FanDuel and DraftKings have received a class action lawsuit. Adam Johnson is the figurehead of the suit after he alleges that “participants in both sites’ daily games were unfairly disadvantaged by employees of each company being allowed to play the other’s game.” Johnson’s case is based around the Kentucky native spending $100 in one of DraftKings leagues and stated that if he had known of the reported insider information, he wouldn’t have spent his money in those leagues.
For more explanation on what the insider information is exactly, here’s a brief explanation from the suit:
“In addition to years of data on optimal strategies, which gives Defendants’ employees a huge advantage over even the most ‘skilled’ (daily fantasy sports) players, Defendants’ employees also have real-time access to data on current lineups of every player in every contest, and the overall ownership percentages of every player.”
Is this suit the start of the end for daily fantasy leagues? Or are these leagues big enough to overcome this latest legal setback.