The U.S. Department of Justice and the FBI have launched an investigation into daily fantasy sports operators, the Wall Street Journal reported Wednesday. FBI agents from the Boston office reportedly have been contacting customers of DraftKings, asking them about their interactions with the company.
The investigators reportedly are trying to determine whether daily fantasy sports games are a form of gambling. But daily fantasy operators, such as DraftKings and FanDuel, have insisted that they offer a game of skill, which makes it legal under terms of the Unlawful Internet Gambling Enforcement Act of 2006. The act prohibits financial companies from transferring money to online gambling sites, but so-called games of skill are exempt.
“It is entirely predictable that the government would follow up on the misleading reports about our industry," a DraftKings spokesperson said in a statement, ESPN reported. "We have no knowledge of the specifics of any federal investigation but strongly disagree with any notion that our company has engaged in any illegal activities."
Last week, DraftKings banned all its employees from participating in any public daily fantasy games for money, days after a New York Times report alleged an employee had used insider data to win a cash prize on the rival site FanDuel.
New York state Attorney General Eric Schneiderman said last week that he would probe DraftKings and FanDuel in an effort to uncover unfair advantages employees from each company could have, ESPN reported. U.S. Sen. Harry Reid of Nevada also expressed interest in conducting a congressional investigation.
DraftKings' ban on its employees' playing for money came after FanDuel made a similar announcement. Like DraftKings, FanDuel hired former U.S. Attorney General Michael Mukasey to look into its internal policies. "Trust with our players is core to our business and has always been our primary concern, so we take any potential game integrity issue very seriously," FanDuel's statement read.