FanDuel founder and CEO Nigel Eccles called Thursday for state-by-state regulation of the daily fantasy sports industry, the Wall Street Journal reported. Eccles’ first-ever public statement of support for formal oversight came as federal and state authorities investigate the legality and business practices of daily fantasy operators.

Eccles touted the benefits state-by-state regulation would have for consumer confidence in the daily fantasy sports industry, which has been under fire for weeks, since a DraftKings employee accidentally leaked inside information about fantasy football lineups the same week he won $350,000 in a contest at rival FanDuel. Formal regulation of the industry should include standardized safeguards to protect confidential information, age verification and the separation of user money from daily fantasy sports’ operating funds, he said.

The FanDuel CEO praised current efforts in Illinois and other states to regulate daily fantasy sports. The Fantasy Sports Trade Association’s creation this week of a self-regulatory panel to police operators was only part of the solution, Eccles said.

“Consumers want a higher level of protection,” Eccles told the Wall Street Journal. “They need to know it’s fair, that the information is protected. If the consumer doesn’t trust the industry, then the business doesn’t exist.”

FanDuel and DraftKings are the United States’ most successful daily fantasy sports operators, with valuations of more than $1 billion apiece and hundreds of millions of dollars in private investments. In total, the daily fantasy sports industry will generate a projected $3.7 billion in entry fees in 2015, according to Eilers Research, a California-based industry analysis firm.

Eccles outlined his view on formal regulation in a letter to FanDuel customers, adding that commissioners of several of the country's major sports leagues, such as the NFL, the NBA and MLB, support some form of regulation.

“To be clear, our industry needs strong, common-sense, enforceable consumer protection requirements to ensure its continued growth and success,” Eccles said in a statement. “A number of smart, but tough, proposals in various state legislatures have begun to emerge, which I believe can serve as the basis for the sensible regulation of the fantasy sports industry.”

The daily fantasy sports industry remains largely unregulated thanks to a 2006 federal statute that excluded fantasy sports from bans on other types of online wagering. But the industry’s legality is in question this month as the FBI and U.S. Department of Justice probe its business model. Nevada regulators recently banned daily fantasy sports companies from operating until they obtain gambling licenses.

DraftKings did not immediately respond to International Business Times’ request for clarification of its stance on formal regulation of the daily fantasy sports industry.