Adam Johnson, a daily fantasy sports customer in Kentucky, has "filed a lawsuit against DraftKings and FanDuel, accusing the companies of fraud because they failed to disclose that their employees had access to insider data the suit claims could help them ... win millions at the expense of regular customers," according to Brent Schrotenboer of USA TODAY. Johnson filed his federal lawsuit in N.Y. on Thursday and it is "proposed as a class action," seeking unspecified damages "on behalf of himself and others 'similarly situated.'" The suit said that DraftKings employees "have won at least" $6M playing on FanDuel. The suit also noted that FanDuel "profiled one of its own employees who played on other sites and had won $50,000 in a short period of time -- an article that has since been removed from FanDuel’s website" (USA TODAY, 10/9). ESPN.com's Darren Rovell noted Johnson, who "says he deposited $100 into a DraftKings account," claimed in his suit that daily fantasy games put forth by the two companies are "misrepresented as fair" (ESPN.com, 10/8).
REALITY OF FANTASY: A BOSTON GLOBE editorial stated daily fantasy sports are "seen as particularly addictive, just like traditional regulated gambling." One possible solution "requires federal action -- Congress could just close the loophole, or tighten it to preclude daily fantasy sports." But all fantasy sports "shouldn’t be banned -- they just need regulation, as the 'insider' gaming episode makes clear." The fantasy sports industry, as gambling, "needs to be treated like other forms of gambling in which there are clear rules, and the state gets a cut" (BOSTON GLOBE, 10/8).
