United States Sen. Robert Menendez and Congressman Frank Pallone have asked the Federal Trade Commission to investigate daily fantasy sports operators who allowed employees with access to nonpublic information to compete on rival sites.
“Allowing employees of fantasy sports websites with access to nonpublic information to participate in online fantasy games, even if the games are operated by other fantasy sports companies, could give those employees an advantage akin to insider trading,” Menendez and Pallone stated in an Oct. 6 letter to the FTC. “Therefore, we also ask the FTC to investigate whether this constitutes an ‘unfair or deceptive practice’ as defined in Section 5 of the FTC Act.
“We believe that fantasy sports should be legal and subject to appropriate consumer and competitive protections.” The FTC did not immediately respond to a request for comment.
Pallone and Menendez held a news conference at noon Tuesday outside of MetLife Stadium to discuss fantasy sports.
“Daily fantasy sports is an industry crying for consumer protection,” Pallone said. “Despite its explosion in popularity and the allegation of ‘insider trading’ by employees of daily fantasy sports operators, the industry is operating in a void within the legal structure — without any regulation or the necessary transparency. The backdrop of MetLife Stadium calls attention to the fact that the same professional sports leagues and teams that support and invest in fantasy sports betting are opposed to and serve as a barrier to professional sports wagering. The illegality of sports betting has forced it to function almost exclusively through organized crime, and the lack of regulation of daily fantasy sports has left the industry open to unfair practices and consumer vulnerabilities. Both need to be taken out of the shadows and should be legal and regulated.”
More at ESPN