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NY US Attorney's Office Looking at Daily Fantasy Sports
Wednesday October 21,2015 : A FAMILIAR NAME IN LATEST DAILY FANTASY SPORTS DEVELOPMENT (Update)
Southern District of New York enforcers go to work again.
Online poker sector observers will be familiar with the name Preet Bharara, the US Department of Justice official who spearheaded the Black Friday enforcement attack on internet poker sites four years ago, decimating the US online poker market.
The Wall Street Journal reports this week that Bharara, and his team at the US Attorney's Office for Southern New York, is back...and this time the investigation is aimed at the daily fantasy sports vertical which has reluctantly been dragged into the spotlight following "insider" accusations that have yet to be proved
Whether Bharara's team has been quietly watching DFS developments and has opened an investigation coincidentally with the media storm currently swirling around market leaders DraftKings and FanDuel, or whether their interest has been piqued by political demands for enquiries, is not clear, but an investigation is now in progress, according to Wall Street Journal sources.
In parallel, the respected Journal reveals, is an exercise by senior Justice Department lawyers in Washington to decide whether daily fantasy sports betting violates federal gambling statutes and should no longer enjoy the benefits of its carve-out in the Unlawful Internet Gambling Enforcement Act..
The Department of Justice moves are just the latest in a series of enquiries and reviews of DFS mounted by at least three state AGs, a Grand Jury enquiry in Florida, a reported FBI investigation and calls by several influential state and federal politicians for state and/or Congressional hearings.
Approached with the news, a DraftKings spokesperson reiterated the company's belief that the skill-based games on its website, and DFS in general, are legal.
Independent legal experts told the WSJ that Bharara’s involvement marks a significant escalation of the legal challenges the DFS vertical.
“Because of his past and his reputation, this is probably the most frightening development yet for the industry,” said Daniel Wallach, a sports and gaming attorney.
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