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 "There's absolutely scandalous conduct taking place through those
programs, fantasy sports," Senate Democratic Leader Harry Reid told
reporters.
"I think it also should be a warning-shot to everybody that online
gaming is a real scary thing and we ought to look at all of it,"
said Reid, who is a former Gaming Commission head in Nevada, a hub
of the industry.
Reid's statement raises the prospect of congressional scrutiny and
possibly new regulations for websites such as DraftKings and FanDuel
that have drawn millions of users who pay a fee to compete for daily
prizes by assembling teams that accumulate points based on how the
players did in actual games.
Meanwhile, Representative Frank Pallone and Senator Bob Menendez,
both New Jersey Democrats, asked the Federal Trade Commission to
look into the fantasy scandal.
 Both companies confirmed on Monday that a DraftKings employee won
$350,000 from a $25 entry fee in an American football contest.
According to a trade group, the employee inadvertently released
player data - a practice that experts liken to insider-trading.
The two privately held companies say they temporarily banned
employees from playing daily fantasy sports.
The House of Representatives could hold hearings this fall, said
Pallone, the top Democrat on the Energy and Commerce Committee. The
Republican-controlled committee is looking into the issue, a
spokesman said.
The issue could draw the attention of conservatives like House
Judiciary Committee Chairman Bob Goodlatte, who has pushed to outlaw
other forms of online gambling.
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Critics say daily fantasy sports services allow fans to bet with a
frequency akin to gambling and led to the rise of the two industry
leaders.
So far, fantasy sports services have escaped the restrictions that
have outlawed sports betting in most states.
The Fantasy Sports Trade Association has spent $80,000 over the past
year to defend its interests in Washington, lobbying records show.
The group declined to comment.
Online gambling foes who are pushing for a nationwide ban on
casino-style Internet gambling are not yet targeting fantasy sports
services. But they may raise the DraftKings incident as another
example of perils of online betting as they make their case,
according to a former congressional aide now working to ban online
gambling.
(Reporting by Andy Sullivan and Diane Bartz, writing by Andy
Sullivan; editing by Alan Crosby)
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