Probably the biggest hit to come to sites like DraftKings and FanDuel came this past week when it was reported that an employee for the former won $350,000 in a competition run by the latter. This sparked a lot of raised eyebrows as well as allegations over insider trading (and a general lack of transparency). That's because the key (as we understand it) to winning these competitions is choosing players your competitors have overlooked. After all, what good does having Tom Brady do you if every other person you're up against has him as well?

Of course you and ourselves, the lowly intended audience for said sites, aren't privy to such information. Thus it would appear that there's an inherent disadvantage (of course the whole point of a lawsuit is for the courts to figure that out).

Today a fantasy footballer out of Kentucky, Adam Johnson, filed a class action lawsuit in Manhattan federal court against both sites because employees from those organizations could compete in competitions run by the other. Johnson had spent $100 on DraftKings, but claims he would've avoided it (which you should anyway) had he known “defendants were working in concert to allow employees of DFS sites to play against them.”

The suit reads, in part:

"In addition to years of data on optimal strategies, which gives Defendants’ employees a huge advantage over even the most ‘skilled’ (daily fantasy sports) players, Defendants’ employees also have real-time access to data on current lineups of every player in every contest, and the overall ownership percentages of every player." 

The lawsuit follows Monday's revelation that Ethan Haskell, an employee of DraftKings, admitted that he leaked info regarding which players were the most frequently chosen on the site. Later that week Haskell pocketed $350,000 after coming in second on a FanDuel run competition.

Last year it was reported that DraftKings alone had over one million registered users, which of course explains how they have the deep pockets to be running ads 24/7. It also says there's a potentially large base out there who could make this a gargantuan lawsuit. 

[via Sports Illustrated]

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