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DFS data leak: employees cheating? (1 Viewer)

So it comes out that DK employees won 0.3% of the money on Fanduel... somewhere in the range of $6-10 million. And this is a SMALL company. Ethan's $350k win took the headlines, but their whole team was raking in winnings. Each and every one of them earning several times their salary from winnings on other sites. Think of it like an investment bank -- solid but relatively modest salaries, and HUGE bonuses. So a $75k paycheck, but "office perks" worth several hundred thousand!
Are you adding an extra zero? Six million dollars divided by 300 employees would be $20,000, and that's over several years -- so call it $7,000 a year. It might be more like $10 million divided by (a weighted average of) 150 employees, but the "several hundred thousand" still seems off by more than an order of magnitude.

(I think DraftKings has around 500 employees now, but had under a hundred a few years ago, so it's tough to say what the denominator should be.)
I tend to get carried away.... certainly could be overestimating by a factor. I was thinking $10m divided by a couple hundred employees, assuming some don't actually play much DFS. Of course the range of outcomes is probably great, some winning just a few thousand and others winning 6 figures.

 
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chet said:
Peyton Marino said:
serious question: are we nearing the end?
Serious answer:

I am sure we are nearing the end of something.
yea for sure. just a matter of what, I guess. kind of hoping we're nearing the beginning of legalized and regulated sports betting in general (DFS included there because yes, it is gambling). but who knows.

 
Some excellent coverage:

http://www.nytimes.com/2015/10/16/us/finding-who-and-where-within-the-sports-cyber-betting-universe.html

http://www.nytimes.com/interactive/2015/10/15/us/sports-betting-daily-fantasy-games-fanduel-draftkings.html?hp&action=click&pgtype=Homepage&module=photo-spot-region&region=top-news&WT.nav=top-news&_r=1

http://www.nytimes.com/interactive/2015/10/15/us/online-gambling-illegal-bet.html

The Times is covering this story from a much wider angle, taking in off-shore straight up gambling sites like Bovada and their brethren, which are technically illegal but exist due to the internet. Tracking servers and hosting sites and their efforts to attract new customers in the US despite illegality.

Second article starts to delve into DFS and the regulatory framework that allows it to exist, and the 'scandal'. They have a video story on some college kid earning 6 figures on DFS (by PBS Frontline):

http://www.nytimes.com/video/us/100000003967230/mr-fantasy-sports-fan-plays-big-online.html?action=click&contentCollection=U.S.&region=Footer&module=WhatsNext&version=WhatsNext&contentID=WhatsNext&moduleDetail=undefined&pgtype=Multimedia

“People would argue that it’s a victimless crime, and it’s not,” said Richard A. Brown, the Queens district attorney, who has successfully prosecuted several gambling rings with Mafia connections. “Those who participate in it often use threats and intimidation.” Profits from these illegal rings also fund other criminal enterprises.
This is only because of legislation that pushes sites offshore and into the shadows. If you could bet on a domestic site with oversight, there wouldn't be threats and intimidation.

Side Note - "The Times" referring to itself like this, often in mid-sentence, is about as irritating at "THE Ohio State University". Yeah, we get it. It's a state university in Ohio, there shouldn't be more than one.

 
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About to get really, really off-topic, but this illustrated the convoluted, tangled web of private, state (and Tribe) interests that that somehow all connect to online gambling.

From the NYT:

The Times also traced Internet traffic to the popular offshore site Bovada.

At the request of The Times, Doug Madory, director of Internet analysis for Dyn, an Internet performance company, analyzed the routes by which computers in the United States gained access to Bovada. Mr. Madory concluded that United States Internet traffic is funneled through a private network to the data center on the Mohawk reservation.

The private network, which provides direct links to havens of gambling infrastructure like Malta, Gibraltar and the Isle of Man, is called Continent 8 Technologies and was co-founded by J. Michael Tobin, a former director of Empire State Development, the lead economic development agency for New York State, records show. The Mohawk data center is managed by Continent 8.
I've previously done some research on "Empire State Development" and one of their public-private partnerships. They were involved in a project with Goldman Sachs and New York State (http://www.liifund.org/products/community-capital/capital-for-healthy-food/new-york-healthy-food-healthy-communities-fund). They received some state grants (e.g., free money) and some funds loaned from Goldman that were in turned loaned to grocery stores in under-served areas (you may have heard of "urban deserts" where the only readily available food is junk food and fast food, with little access to fresh vegetables and healthier options). Sounds great, right?

The problem is that Goldman and this newly created public private entity loaned the money out to small mom and pop style grocery stores in very large amounts. Like a $1m+ to renovate your grocery store in Mt Vernon, NY (a poor area north of the Bronx). The idea being, after you expand your grocery store, you can have more space to sell veggies. Or, more people would come because the store is nicer. No funds were allowed to purchase inventory of food, but were allowed only to renovate and expand existing stores or build new stores. This being Goldman Sachs, they wanted a nice return on their investment, so the rates are not exactly charity (understandable given the risk that the funds are being loaned to grocery stores in poor areas and that groceries are very low margins for profits). The loans were also secured by personal guarantees from mom and pop owning the store.

If the grocery store were to default and not be able to pay back their jumbo, sub-prime, high-interest loan (something like 6% in a very low interest rate market), the lender would be able to foreclose on the store and collect any deficiency from the owner who provided the personal guarantee. So, now you've potentially got a poor urban area with just a few junk food bodegas and fast food stores, and the one grocery store in the area is shut down because they borrowed too much money.

Oh, and that portion of the loan that is a "grant" courtesy of NYS -- that's fully taxable as income. So you get a $1m loan with a $100k grant, you've got a tax bill of $30k on the income from the grant in addition to the substantial interest payments on the $1m. And when the term of the loan is up, you've got a huge chunk of principal to pay back (does not fully amortize). Or, you can refinance it into the future, and extend the revenue stream to Goldman for additional years.

The other semi-crooked aspect of this joint venture is that all profits go to Goldman, while all losses are borne by the state of New York (for instance if the loan defaults and the foreclosure and the guarantee aren't enough to pay back the full loan). Privatized profits, socialized losses. Overall, it's a small program (just $30 million), but it's essentially a tax subsidy granted to Goldman courtesy of New York with the stated purpose of providing healthy food to low income residents (who, along with the grocery store owners and NYS tax payers, fund the subsidy to Goldman).

And somehow this dude from the ESD board is connected to hosting servers that feed into Bovada. :crazy: Which makes the whole operation seem even less reputable.

http://esd.ny.gov/BusinessPrograms/HealthyFoodHealthyCommunities.html

Side Note - the managing director at Goldman that lead this project was Alicia Glenn, who is now the deputy mayor of Housing and Economic development in NYC (appointed by De Blasio to increase low income housing options):

http://www.nytimes.com/2013/12/24/nyregion/de-blasio-taps-a-goldman-executive-as-deputy-mayor-of-housing.html.

http://therealdeal.com/issues_articles/city-halls-goldman-girl-alicia-glen/


 
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So what does this Nevada thing mean for the Vegas trips and stuff on FanDuel? Do they have to take place somewhere else now? And if they apply for a license does that mean they admit they are gambling and therefore illegally operating? Wow this is turning into such a mess so quickly. I knew heat was going to come down once I saw the ad blitz at the beginning of the season but I didn't expect all this so fast.

 
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another lawsuit

http://www.nbcnews.com/news/us-news/draftkings-fanduel-accused-racketeering-new-lawsuit-n445571

DraftKings, FanDuel Accused of Racketeering in New Lawsuit

The Louisiana case goes further, accusing DraftKings and FanDuel of engaging in corrupt enterprises under the Racketeering Influenced and Corrupt Organizations act, or RICO, the 1970 law that the federal government uses to pursue the Mafia and other organized crime gangs.
This is brilliant. The regular class action was seeking "restitution of entry fees, actual damages plus interest and unspecified punitive damages" but the civil RICO case allows for triple damages.

 
I was thinking that DFS would last out the NFL season. I'm not so sure now.

Guess it's time to go big or go home with the $$$ in the sites.

 
So what does this Nevada thing mean for the Vegas trips and stuff on FanDuel? Do they have to take place somewhere else now?
I'm just speculating, but I'm guessing they'll partner with someone who has a license, like Harrahs or someone.

And if they apply for a license does that mean they admit they are gambling and therefore illegally operating?
If they apply for a license, they'll be admitting that they're applying for a license. That's it. They won't even be admitting that DFS requires a license under Nevada law (sometimes people do stuff that's not required), much less that it's "gambling" in any way that matters apart from Nevada law.

 
I knew heat was going to come down once I saw the ad blitz at the beginning of the season but I didn't expect all this so fast.
In retrospect -- would the DFS industry just been better off letting the "customer" base grow slower and steadier? Or was it a thing where some people high up with the DFS companies knew something would come down eventually, and sooner rather than later?

 
So what does this Nevada thing mean for the Vegas trips and stuff on FanDuel? Do they have to take place somewhere else now?
I'm just speculating, but I'm guessing they'll partner with someone who has a license, like Harrahs or someone.

And if they apply for a license does that mean they admit they are gambling and therefore illegally operating?
If they apply for a license, they'll be admitting that they're applying for a license. That's it. They won't even be admitting that DFS requires a license under Nevada law (sometimes people do stuff that's not required), much less that it's "gambling" in any way that matters apart from Nevada law.
Yeah but if they do that, will the leagues still stick beside them? If the NFL wouldn't let Romo have a fantasy convention at a casino, how are they going to support the DFS sites if they partner with a casino?

 
I knew heat was going to come down once I saw the ad blitz at the beginning of the season but I didn't expect all this so fast.
In retrospect -- would the DFS industry just been better off letting the "customer" base grow slower and steadier? Or was it a thing where some people high up with the DFS companies knew something would come down eventually, and sooner rather than later?
I think the ad blitz that is going on this season is just business and not knowledge that they knew something would happen soon...just the two biggest companies in the industry making a push for all of the remaining potential customers out there.

I do think the tweet that started all of this might have been more easily swept under the rug if the industry was still a bit more under the radar.

 
So what does this Nevada thing mean for the Vegas trips and stuff on FanDuel? Do they have to take place somewhere else now?
I'm just speculating, but I'm guessing they'll partner with someone who has a license, like Harrahs or someone.

And if they apply for a license does that mean they admit they are gambling and therefore illegally operating?
If they apply for a license, they'll be admitting that they're applying for a license. That's it. They won't even be admitting that DFS requires a license under Nevada law (sometimes people do stuff that's not required), much less that it's "gambling" in any way that matters apart from Nevada law.
Yeah but if they do that, will the leagues still stick beside them? If the NFL wouldn't let Romo have a fantasy convention at a casino, how are they going to support the DFS sites if they partner with a casino?
Good question.

 
I think any investigation has to take a close look at whether the employees accessed the top players' lineups prior to the lock time. They should also compare Ethan's FD lineups to top FD players' lineups to see if there is any unusual correlation. This type of investigation should show whether there was any illicit activity.

 
Agree with MT. I think this will be quickly resolved as Vegas doesn't want a boycott by the dfs players.
Vegas wouldn't even notice if DFS players boycotted. They just want their piece
I suspect the sports books would. There has to be a huge overlap in that community.
Even if there is, 99% of the overlap isnt going to think about skipping a Vegas trip even for a second.
That's the type of thinking that will let Vegas do whatever it sees fit. DFS is a huge industry, these companies and the players need to start pushing back.

 
99.9% of dfs players are casual. They'll pout a little, but actually skipping a trip to Vegas over it wouldn't even be a consideration.

 
99.9% of dfs players are casual. They'll pout a little, but actually skipping a trip to Vegas over it wouldn't even be a consideration.
I guess this is why Hillary is popular.

I'd be damned if I'd spend a dime in a city that took away dfs.

I just envision the guys packing the sports books on weekends watching the games while running up hefty tabs are probably playing dfs at the same time.

 
99.9% of dfs players are casual. They'll pout a little, but actually skipping a trip to Vegas over it wouldn't even be a consideration.
I guess this is why Hillary is popular.

I'd be damned if I'd spend a dime in a city that took away dfs.

I just envision the guys packing the sports books on weekends watching the games while running up hefty tabs are probably playing dfs at the same time.
Hillary is popular because she's honest, bold, and a champion of the people!And now back to reality. People are selfish and lazy. I'd like to think people will care. But they won't. The only difference is instead of playing dfs they spend that money on another 10 team parlay at the sportsbook instead.

 
Shocking -- SHOCKING I say -- that the 1 state that allows sports wagering would declare DFS a violation of state law if provided by anyone who doesn't already have a sports wagering license in that state.

I'm actually shocked it took Nevada this long. Vic gives it 5-to-1 that the sports books started seeing a dent in their bottom line, which led to the Nevada Gaming Commission to reach this conclusion seemingly out of the blue.

 
http://www.wtae.com/news/pennsylvania-considers-limiting-fantasy-sports-gambling/35880662

Legislation to limit daily fantasy sports websites in Pennsylvania to those sponsored by the state's 12 casinos is slated for a committee vote next week in the state House of Representatives.

The proposal would shut out major fantasy sports websites such as DraftKings and FanDuel unless they strike a deal with the state-licensed casinos, said Rep. George Dunbar, whose amendment was expected to be considered Wednesday by the House Gaming Oversight Committee.

:(

 
Bummer. Guess this will probably be the last weekend I'll be able to play. I play for very little usually but maybe will play a little more this weekend.

 
The point I don't think people have quite fathomed yet isn't the fact that partnerships will form or that DFS will indeed survive. The point is that, just like horse racing, as the states and regulators get more involved things will get more and more expensive for the operators, thus driving the rakes so high the that the game will ultimately become unwinable, at least as far as "professional" or even just "serious" players will be concerned. How this will shape industry profits longer term in the DFS industry has yet to be seen. The irony is that at that point, if it isn't already "gambling, it really WILL just be "gambling."

 
Bummer. Guess this will probably be the last weekend I'll be able to play. I play for very little usually but maybe will play a little more this weekend.
Nah. This is just a power play to give the local shops a cut of the action. Expect partnerships very soon.
But they are also voting to legalize online gambling so it appears as if they might be trying to get rid of the competition in the state while doing so.

I hope you are right though.

 
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Bummer. Guess this will probably be the last weekend I'll be able to play. I play for very little usually but maybe will play a little more this weekend.
Nah. This is just a power play to give the local shops a cut of the action. Expect partnerships very soon.
But they are also voting to legalize online gambling so it appears as if they might be trying to get rid of the competition in the state while doing so.

I hope you are right though.
Actually...maybe it would make sense for some of the casinos to partner with Draftkings and FanDuel if online gambling is approved? That way they would be able to get a little cut of the action and also drive some users to the new online casino sites?

 
Bummer. Guess this will probably be the last weekend I'll be able to play. I play for very little usually but maybe will play a little more this weekend.
Nah. This is just a power play to give the local shops a cut of the action. Expect partnerships very soon.
But they are also voting to legalize online gambling so it appears as if they might be trying to get rid of the competition in the state while doing so.

I hope you are right though.
Actually...maybe it would make sense for some of the casinos to partner with Draftkings and FanDuel if online gambling is approved? That way they would be able to get a little cut of the action and also drive some users to the new online casino sites?
The tech guys could speak much more intelligently about it than I, but I suspect the brick-and-mortar shops lack the tech savvy to efficiently deliver online gaming to the public quickly. My assumption is that DK and FD could provide a platform for them to build from, saving time and money.

 
Shocking -- SHOCKING I say -- that the 1 state that allows sports wagering would declare DFS a violation of state law if provided by anyone who doesn't already have a sports wagering license in that state.

I'm actually shocked it took Nevada this long. Vic gives it 5-to-1 that the sports books started seeing a dent in their bottom line, which led to the Nevada Gaming Commission to reach this conclusion seemingly out of the blue.
Nevada pours money into campaigning against the expansion of tribal casinos in CA. They've never been in favor of gambling for everyone, just for themselves as much as possible.

 
I'm playing a $1 double up at Draft Kings today. There are 7 of the 34 lineups that are exactly identical. 7 different usernames.

The lineup is:

Palmer

Ivory

E Lacy

K Aiken

Edelman

Fitzgerald

J. Cameron

A. Foster

NY Jets

How is this possible that 7 random users in a field of 34 random users select those exact same players?

 
I'm playing a $1 double up at Draft Kings today. There are 7 of the 34 lineups that are exactly identical. 7 different usernames.

The lineup is:

Palmer

Ivory

E Lacy

K Aiken

Edelman

Fitzgerald

J. Cameron

A. Foster

NY Jets

How is this possible that 7 random users in a field of 34 random users select those exact same players?
Buying lineups on the internet

 
I'm playing a $1 double up at Draft Kings today. There are 7 of the 34 lineups that are exactly identical. 7 different usernames.

The lineup is:

Palmer

Ivory

E Lacy

K Aiken

Edelman

Fitzgerald

J. Cameron

A. Foster

NY Jets

How is this possible that 7 random users in a field of 34 random users select those exact same players?
How did you select the players? Looks like a Daily Crusher lineup.

 
I'm playing a $1 double up at Draft Kings today. There are 7 of the 34 lineups that are exactly identical. 7 different usernames.

The lineup is:

Palmer

Ivory

E Lacy

K Aiken

Edelman

Fitzgerald

J. Cameron

A. Foster

NY Jets

How is this possible that 7 random users in a field of 34 random users select those exact same players?
How did you select the players? Looks like a Daily Crusher lineup.
I'm not one of the seven. I noticed seven exact same scores and looked. It's pretty stupid to be honest. DFS is a Great concept but horrible result. And I'm not buying 7 people chosen at random amongst all the players out there had that exact same lineup and ended up in a pool of 34 random players. Crazy.

 
This has gone from ooh and ahh, hmmm to feeling bad for them. The onslaught just keeps coming.

First couple days some Ethan jokes were funny. He's somewhat wise and humorous so I didn't think it was so bad. Now it's passed a point and I feel bad for the guy.

On almost every site, if not every site, there is some comment with a variation of this- I always win in my office league and I am terrible at DFS....from there it must be gambling, it must be fixed, it must be something negative. They are so convinced they are the greatest FF participant that they totally miss the fact that other people might be better.

I have no idea what Ethan scored when he won. I assume 225-250. The number of people that complain they didn't win with a score of 100-125 is odd. They totally miss that there were probably thousands of people with better scores, not just Ethan. They were losing because they had a bad team not because Ethan did or didn't cheat.

The anger and/or rage of the people with the previous two issues (mentioned above) does not at all mesh up for me. I can't relate at all. I assume sore loser or embarrassed they bragged they were so awesome at FF while truly they're not so good. The guys that were just behind him in that contest-oh I'd understand their displeasure if they even spoke out. Thousands of spots behind...cmon now.

BnB's point above is outstanding. I am no longer ugh another FD or DK commercial but instead thankful it's not a political one.
If they data they (employees of DK and FD) were using to build lineups wasn't helpful in giving them an advantage to beat the general public then they wouldn't be using that data. It has nothing to do with where one individual finished. Your post is pretty idiotic acting as if only the person one spot behind Ethan has the right to have an opinion about his shadiness.

Only a moron would believe that ALL Ethan did was use DK data to play at Fanduel. It's amazing what people will believe. I'm not stunned the people that make money off DFS (John Lee being employed here because of DFS, for example) will defend everything about it. But the general public is smarter than this, right?
Law firm's report says DraftKings employee locked in roster before receiving datahttp://espn.go.com/chalk/story/_/id/13924648/investigation-commissioned-draftkings-says-employee-locked-lineup-receiving-internal-data

*Too much negativity in this thread for me to want to comment any further with my own opinions or vantage point(s), but I felt obligated to share this report from ESPN that clears Ethan's name from any wrongdoing.*

 

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