What should everyday fantasy sports do now?

Panduel and DraftKings, two big players in the daily fantasy sports (DFS), and their backers, are in “Deep Doodoo,” in former President George H.W. Bush’s immortal words, but lawyers with legal shovels can probably dig them out.

Last year alone, the DFS industry’s problems were relatively minor. Like in the early days of Internet poker, businesses were making enough money to afford to shake off some of the game’s scattered questions about its legitimacy. 파친코

As interest in DFS has exploded, it has been influenced in part by an unprecedented large-scale TV advertising campaign. DraftKings and FanDuel are more than just significant advertisers on ESPN. “In fact, about 59 percent of the increase in media advertising revenue last quarter ($134 million) came from fantasy sites.” 1 However, scandals in late September 2015 left operators with unwanted attention, including threats from government officials that DFS operators would be arrested if they didn’t stop taking players from Nevada and New York.

This scandal could have been easily avoided. A DraftKings manager accidentally released confidential information about which actual DFS players were selected, and perhaps, coincidentally, the same manager made $350,000 playing fantasy football for rival FanDuel. Of course, this seemed to be how the DraftKings staff used internal information to give them an advantage in deciding which players to select for the FanDuel Fantasy team.

Like all new games, online fantasy sports are created by and staffed by people who like to play the same game. Legal games, especially internet gambling, especially those with experience like a lawyer, would have warned operators to ban their staff from participating in high-risk DFS games.

Both FanDuel and DraftKings seem to have banned their employees from participating in their actual money games. However, because there are only two large operators, employees of each company should not have been allowed to play on other companies’ sites. At the very least, individuals with inside information should have contracts warning them that they would have been fired if they were found to have participated in the costly real-money DFS games.

I would also have recommended that any employee who earns more than $1,000 in a DFS game in violation of an employment contract include a liquidation damages clause that causes the employer to lose all money earned. Liquidation damages are included in the contract when a party knows that it is difficult to measure or prove the actual damage that will be caused by the breach. Given the potential harm that an insider may have caused to the operator’s reputation by obtaining a large amount of money, it is likely that the liquidation damages clause has been upheld. At least you would have warned your employees that playing DFS games for money is not worth the risk.

The risk was not limited to DFS operators. Investors, media outlets, and real-life sports teams could also be dragged into legal turmoil.

The worst direct punishment was the passing of criminal law, especially state and federal law, to fight organized crime. If DFS is indeed illegal, companies like ESPN can be held criminally liable just for running advertisements from their operators.

Helping someone else commit a crime, commonly called aiding and abetting, makes an accomplice guilty of the crime. So if DFS operators are violating federal wire laws that make it a crime to send useful information to bet on sporting events across state lines, the companies that run DFS ads will also be convicted of the crime.

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