On Thursday October 29, 2015, in a letter to website users, FanDuel, Inc. CEO Nigel Eccles called for “formal” government regulation to govern daily fantasy sports (DFS).
Eccles’ letter comes following a month-long bombardment of class action lawsuits and negative press coverage against the two DFS industry leaders, FanDuel, Inc. and DraftKings, Inc. The legality of the companies’ business operations has been placed in question; namely, whether DraftKings and FanDuel engaged in insider trading, unfair practices, and illegal gambling operations is at issue. The two companies were initially placed on the hot seat in late-September when news broke that a DraftKings employee used inside information to gain a competitive edge while gambling on the competitor website operated by FanDuel.
In Eccles’ letter to users he stated that the rapid growth of the DFS industry has led to the need for consumer-protection laws. “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,” Eccles said in the letter. The new legislative proposals in states across the nation include proposals for age and location verification, segregation of user funds, protections against insider or “proprietary contest information,” and protections for users’ personal information.