Reid wants Congress to examine fantasy-sports betting
October 08, 2015 10:11 AM
by Phil Hevener
Harry Reid, the top Democrat in the U.S. Senate, wants Congress to examine fantasy-sports betting services. Reid’s call for action came this week after reports that an employee with access to insider information placed bets in the unregulated multi-billion-dollar industry.
"There's absolutely scandalous conduct taking place. 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 Chairman of the Nevada Gaming Commission.
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.
Reid and others have pointed out that the current scandal erupted largely because, unlike Nevada-based sports wagering, the fantasy action is unregulated at both the state and federal levels.
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 such as Florida sports attorney Daniel Wallach liken to insider trading.
As is often the case, lawmakers looking at fantasy wagering may have other agendas. In some cases this could be a hope that congressional reviews will open the door to action that would allow regulated sports wagering, a move that would interest at least a half-dozen states that are keeping watchful eyes on how this issue evolves because they would like access to the widespread legalized and thoughtfully regulated sports betting would generate.
Is this possible because of the attention the fantasy wagering scandal has received?
“God, I hope so,” said Las Vegas attorney Greg Gemignani. “The world has changed in so many ways since the early 1960s (when current prohibitions such as the Wire Act) were put in place.”
Phil Hevener has been writing about the Nevada gaming business for more than 30 years. Email: PhilHevener@GamingToday.com.