FanDuel & DraftKings Are Facing Class Action Lawsuit for Insider Trading

DFS

Daily Fantasy might be shaking to its core

It has been less than a week since it was discovered that Daily Fantasy employees might have an advantage over others playing on any given week, in the “insider trading” controversy surrounding DraftKings and FanDuel. Apparently, employees were playing in matches for other competitors and coming up victorious, which made people question how much of their knowledge was used to win, as opposed to specific algorithms inside the company that gave them the edge.

An internal investigation found that employees were not at fault and things were looking to boil over until a class action lawsuit was filed in the U.S. District Court for the Southern District of New York. The lawsuit seeks damages after FanDuel & Draft Kings conspired to commit negligence, fraud and deception against Adam Johnson.

Johnson alleges that it’s insider information that’s helped Daily Fantasy employees win “at least $6,000,000” in prizes. Hundreds of users can potentially join the suit after feeling cheated, claiming the system is rigged.

FanDuel and DraftKings argue that it’s the employees knowledge of fantasy sports that gives them the competitive advantage and that working at such companies makes them more of an expert than most. So the odds are higher for them to win.

It’ll be interesting to see how a court rules it, which might change the Daily Fantasy landscape as we currently know it.

[Source]

  • Share this :
Comments