A RISING star of Scotland’s world-renowned technology sector has banned its own staff from playing any daily fantasy games for money, on any site.
Edinburgh-based FanDuel, which runs online fantasy leagues in baseball and basketball for cash prizes, has stopped its 500 staff from playing the games while the US Justice Department and Federal Bureau of Investigation (FBI) probes the lucrative sector.
It comes after reports in the US said an employee of DraftKings, a fellow fantasy sports provider, had effectively used inside information to win $350,000 (£230,000) on the FanDuel site.
The move comes amid heightening scrutiny of the legal status of fantasy sports gaming in America, which is believed to have as many as 41 million active players in the US.
It is classed as a game of skill in most states but the Nevada Gaming Control Board recently ruled that it is a form gambling, meaning FanDuel can no longer offer its games there.
A spokeswoman for FanDuel, a so-called tech “unicorn” believed worth more than $1 million, confirmed a federal investigation was ongoing but refused to comment any further.
However, it said in a statement on its website: "We have permanently banned our employees from playing any daily fantasy games for money, on any site. We will also require all customers to confirm that they are not an employee of any other third party fantasy site, and if they are, they will not be allowed to access our site."
FanDuel focuses exclusively on US sports such as baseball, grid iron and basketball. To date, its games are only available for play in the US, where the company employs more than 200 staff.
FanDuel said there is currently no evidence that any employee or company has violated rules introduced by The Fantasy Sports Trade Association that “restrict access to and use of competitive data for play on other sites.”
But it admitted that the “inadvertent release of non-public data by a fantasy operator employee has sparked a conversation among fantasy sports players about the extent to which industry employees should be able to participate in fantasy sports contests on competitor sites.”
The statement added: “We’ve heard from users that they would appreciate more clarity about the rules for this issue. In the interim, while the industry works to develop and release a more detailed policy, DraftKings and FanDuel have decided to prohibit employees from participating in online fantasy sports contests for money.”
The company, meanwhile, declared that it is “terribly disappointed” by the ruling by the Nevada Gaming Control Board that only Nevada casinos can offer fantasy sports.
“This decision stymies innovation and ignores the fact that fantasy sports is a skill-based entertainment product loved and played by millions of sports fans,” FanDuel said.
“This decision deprives these fans of a product that has been embraced broadly by the sports community including professional sports teams, leagues and media partners.”
FanDuel was founded Nigel Eccles, wife Lesley, Tom Griffiths, Rob Jones and Chris Stafford in 2009, who saw the opportunity to innovate in the US fantasy sports market, notably by offering mobile play.
The company is currently experiencing rapid growth, and is expected to rake in $2bn in its current financial year, having generated $600m last year.
It secured backing of $275m from a string of heavyweight backers in July, which paved the way for a series of acquisitions that have boosted its technology and technical expertise.
The most recent funding injection took to £363m the amount raised by the company in external finance. Backing has come from major investors such as Google Capital and Time Warner Investments, as well as professional sports teams in the US.
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