Fantasy Sports Employees Bet at Rival Sites Using Inside Information

[sureLoss]

So employees at Draft Kings and other fantasy sports companies are allegedly taking information not available to the public to play and win money on rival companies websites.

http://www.nytimes.com/2015/10/06/sp...id=tw-bna&_r=0

A major scandal is erupting in the multibillion dollar industry of fantasy sports, the online and unregulated business in which players assemble their fantasy teams with real athletes. On Monday, the two major fantasy companies were forced to release statements defending their businesses’ integrity after what amounted to allegations of insider trading, that employees were placing bets on information not available to the public.

Last week, a DraftKings employee admitted to inadvertently releasing data before the start of the third week of N.F.L. games, a move akin to insider trading in the stock market. The employee – a midlevel content manager — won $350,000 at rival site FanDuel that same week.

The incident has raised questions about who at daily fantasy companies has access to valuable data, how it is protected and whether the industry can — or wants — to police itself.

[Property Manager DB]

Should be able to buy a decent lawyer with $350K...

[VladtheImpaler]

Sorry for being thick, but I never got into the fantasy team thing in football. What inside information can a fan duel employee have that Joe Sixpack doesn't? I assume they don't get special injury status updates from the NFL.

[Hemi-Cuda]

Originally Posted by VladtheImpaler

Sorry for being thick, but I never got into the fantasy team thing in football. What inside information can a fan duel employee have that Joe Sixpack doesn't? I assume they don't get special injury status updates from the NFL.

Yeah, this isn't like insider trading at all. Unless they're somehow fixing professional sports games there should be nothing illegal about what they did

[RougeUnderoos]

Originally Posted by VladtheImpaler

Sorry for being thick, but I never got into the fantasy team thing in football. What inside information can a fan duel employee have that Joe Sixpack doesn't? I assume they don't get special injury status updates from the NFL.

He'd know if the quarterback was on coke... if his girlfriend was knocked up. He'd get the wind velocity so he could judge the field goals. He even figured out the different bounce you got off the different kinds of wood they used. on college basketball courts, you know? He'd be workin' on this #### day and night. There was nothing about a game he was gonna bet that he didn't know.

[ZedMan]

From what I understand (I've never actually used FanDuel or DraftKings), the percentage of people that started player X is not publicly known until the games have started and everyone's lineups are locked in. This guy was using the knowledge that say 99% of people started player Y *before* the lineups were locked to enter bets on the competitors service.

[VladtheImpaler]

Originally Posted by RougeUnderoos

He'd know if the quarterback was on coke... if his girlfriend was knocked up. He'd get the wind velocity so he could judge the field goals. He even figured out the different bounce you got off the different kinds of wood they used. on college basketball courts, you know? He'd be workin' on this #### day and night. There was nothing about a game he was gonna bet that he didn't know.

But they are not betting games. Isn't this all about drafting and selecting lineups? What information do these guys have that I could not get if I had nothing better to do?

[VladtheImpaler]

Originally Posted by ZedMan

From what I understand (I've never actually used FanDuel or DraftKings), the percentage of people that started player X is not publicly known until the games have started and everyone's lineups are locked in. This guy was using the knowledge that say 99% of people started player Y *before* the lineups were locked to enter bets on the competitors service.

So, by knowing whom everyone else is starting, an employee is able to build an optimal lineup relative to the mean?

[ZedMan]

Something like that. According to this article (http://deadspin.com/draftkings-emplo...-35-1734719747) since players are competing against each other, it's about picking the best players that other people *aren't* picking, so under-the-radar picks.

[RougeUnderoos]

Originally Posted by VladtheImpaler

But they are not betting games. Isn't this all about drafting and selecting lineups? What information do these guys have that I could not get if I had nothing better to do?

Yeah, sorry, I don't know either. That's just a quote from the movie Casino.

I'm curious about this too. I guess that these sites have a lot more research/time/grunts to put toward researching this stuff and so they can capitalize on that, but I don't think "knowing more than the other gamblers" disqualifies you, no matter where you get the info, as long as it isn't actual "insider" info.

I couldn't keep track of whether or not my QB was injured when I played fantasy football, but I'm sure these guys know things like "Pittsburgh is his hometown and he always plays great there" kind of thing, so that would be an edge on the rubes.

Total guessing on my part. Just like when I played fantasy football.

[browna]

Timely news, appears to be that MLSE is signing an agreement with Draft Kings tomorrow. Will potentially have as much or more access to inside info (NHL/NBA/MLS/CFL) than Dreger did with the family connection he had with Nonis.

http://www.tsn.ca/mlse-signs-landmar...kings-1.372238

[calumniate]

Does this *effect my hockey pool?

[calumniate]

Originally Posted by ZedMan

From what I understand (I've never actually used FanDuel or DraftKings), the percentage of people that started player X is not publicly known until the games have started and everyone's lineups are locked in. This guy was using the knowledge that say 99% of people started player Y *before* the lineups were locked to enter bets on the competitors service.

There was a pool at the bear and kilt. Deadline was today but that was exactly my strategy, hoping a flames goalie was waived before picking hiller, etc. Ultimately I didn't enter, partly because I didn't show up but also because I hate keeping tabs on teams I don't like!

[Senator Clay Davis]

Use promo code "CHEAT" to enter this week's draw. You could win $1 million, assuming an employee from a rival site already isn't in your pool, then you have no chance. God willing these sites will be shut down just so we don't have to see the ads anymore.

[EldrickOnIce]

Originally Posted by VladtheImpaler

So, by knowing whom everyone else is starting, an employee is able to build an optimal lineup relative to the mean?

Betting trends are likely very similar at both sites. In those big payoff contests, you need to pick guys that most others don't have, and get a big game out of them. If only 1% of people were starting player A and 30% were starting player B (both of whom might have the same chance of results) you want to start player B and hope he has a big game. This obviously differentiates you from the pack.
Knowing which players were being picked would be a big advantage.

[mrkajz44]

I still don't see the line comparing this to insider trading. With insider trading, you know an event before hand that will obviously affect the stock price in one direction - a big takeover drive the stock up, a bad quarterly report drives the stock down, etc.

But in this case, they would still be just betting. There is no certainty (or near certainty) of events that will happen. I guess I don't think it's as terrible as everyone is making it out to be? I wouldn't think it would be too hard to know who is playing what player week from week - if you were in the industry, I bet most people could peg the percentage trends of players within a few percentage points, no?

[flamingreen]

Both sites have the same player values and are setup in a near identical way. If you have internal stats on how many people are picking certain players on one site, it is pretty certain that the stats are the same for the other. The whole idea of the daily fantasy games is to select players who will help the fewest amount of your competitors. If you have that knowledge and no one else does, kind of a significant advantage.

[troutman]

Seems more like inside trading than card counting to me. They are using information that other players can not access.

[Senator Clay Davis]

I can see how it's kind of like card counting, except instead of everyone having the ability to know how to count cards, only insiders within the organization have access to the information that gives them a statistical advantage. But it's not truly cheating since there's still the element of chance involved.

I've also seen some talk that fewer than 2% of all player who go to these actually win money, and predictably its high rollers or degenerates who enter basically everything. I suspect this goes the online poker route and gets shut down in the US, or most states ban it (a few already do)

[YYC in LAX]

Pretty simple. Betting against the confirmed consensus pays dividends. Don't get held up on the insider trading comparison. They are using the private information to gain an advantage on the rival site.