MLB
seeks explanation from DraftKings after disclosure about employee
winnings
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[October 07, 2015]
By Liana B. Baker and Steve Ginsburg
(Reuters) - Major League Baseball said on
Tuesday it was surprised to learn that fantasy sports operator
DraftKings, in which it has an equity investment, allowed its employees
to participate in contests and has reached out to the company to discuss
the matter.
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A DraftKings employee recently won $350,000 from a $25 entry fee in
an American football contest and had other major winnings on rival
website FanDuel, the companies confirmed on Monday.
That has led to a fire storm of criticism from many with connections
to the nascent business as employees are seen potentially having an
edge because they may be able to see how some of the best-performing
participants are behaving before that becomes public information.
Daily fantasy sports, which have only been developed in the past few
years, allow players to draft teams in games played in as little as
one day. This has allowed fans to bet with a frequency that some
critics argue is akin to sports betting or gambling and led to the
rise of the two privately-owned industry leaders, FanDuel and
DraftKings, both valued at more than $1 billion. Most popular games
they offer are American football and baseball.
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Major League Baseball (MLB), which is the major professional
baseball league in North America, has invested twice in DraftKings,
in 2013 and 2015, though it declines to say how large a stake it has
acquired.
DraftKings has a multi-year exclusive marketing partnership with MLB
that offers co-branded fantasy games and "fan experiences."
MLB spokesman Matt Bourne said in a statement that it prohibits its
own players and employees from participating in fantasy baseball
games where money or something of value is at stake, and did not
know that the situation was different at DraftKings. "We have
reached out and discussed this matter with them," he said.
DraftKings and FanDuel have temporarily banned players from playing
daily fantasy sports until they come up with a more detailed policy
on the issue, the companies said in a joint statement Monday.
DraftKings did not respond to a request for comment on MLB's
statement.
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The Fantasy Sports Trade Association, the trade group representing
the two companies and others in the industry, has a rule that member
companies must restrict employee access to competitive data for play
on other sites, it said on Monday.
The National Basketball Association, which is an investor in
FanDuel, said it was monitoring the reports about the use of data in
daily fantasy sports.
NBA spokesman Mike Bass said the league was "advised that all
appropriate actions are being taken to maintain the highest level of
integrity for fantasy players."
The NBA does not allow its players or employees to participate in
NBA fantasy leagues for cash or other things of value.
Other investors in DraftKings, such as Major League Soccer, and the
National Hockey League declined to comment.
(Reporting by Liana B. Baker and Steve Ginsburg; Editing by Martin
Howell)
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