DFS Scandals BEGIN - "INSIDER "TRADING" " (1 Viewer)

[Sammy3469]

Assuming the allegations of them having the roster info and using it for their advantage are true, what laws did they break?

IP theft and/or mail fraud would be the easy ones if I had to guess.

 

[chet]

Assuming the allegations of them having the roster info and using it for their advantage are true, what laws did they break?

IP theft and/or mail fraud would be the easy ones if I had to guess.

Mail fraud?

I'm not a lawyer, but IP theft seems a stretch.

 

[Sammy3469]

Assuming the allegations of them having the roster info and using it for their advantage are true, what laws did they break?

IP theft and/or mail fraud would be the easy ones if I had to guess.

Mail fraud?

I'm not a lawyer, but IP theft seems a stretch.

Your wiki definition:

There are three elements to mail and wire fraud:

1. Intent;
2. A "scheme or artifice to defraud" or the obtaining of property by fraud; and,
3. A mail or wire communication.[4]

To be fraudulent, a misrepresentation must be material.[5]

Mail fraud applies only to United States domestic mailings and use of interstate carriers (UPS, FedEx) which must originate in one state, and successfully terminate pursuant to the address label inside another state, a transportation that is termed "interstate" (over which Congress has power to regulate) and does require that the mailing cross at least one state line into another state; wire fraud has been expanded by Congress to include foreign wire communication or interstate connections via (e.g.) an e-mail server or telephone switch or radio communication

 

[moleculo]

Assuming the allegations of them having the roster info and using it for their advantage are true, what laws did they break?

IP theft and/or mail fraud would be the easy ones if I had to guess.

Mail fraud?

I'm not a lawyer, but IP theft seems a stretch.

I don't think being in possession of trade secrets from company "A" is a crime, even when used for personal gain at company "B". I don't believe there is anything especially illegal about this (yet), but it does really illustrate that the playing field is not level.

The entire fantasy sports industry is so ripe for fraud, it's not even funny. I would never put any money down anywhere, in any league or any format, unless I was competing with people I know (or meet) face-to-face.

competing with internet strangers = gambling. competing with friends = game of skill. it = info.

 

[Zegras11]

Not sure any laws were broken here. There are many shark players that have programs that compile very similar data. This guy had better data for sure, but it doesn't guarantee winning, just a better shot at it.

 

[Good Posting Judge]

Not sure any laws were broken here. There are many shark players that have programs that compile very similar data. This guy had better data for sure, but it doesn't guarantee winning, just a better shot at it.

If he was using that data to win on other sites, he's broken the law.

If Haskell was -- as he's claimed -- using that data to write the ownership % report and had queried it after lineups had locked, then not necessarily.

I don't think Haskell + ownership data is going to be the real crux of this story when it's all said and done, I think it's going to be multiple people at both big sites using insider data in multiple ways to win on the other side.

 

[Maurile Tremblay]

Not sure any laws were broken here. There are many shark players that have programs that compile very similar data. This guy had better data for sure, but it doesn't guarantee winning, just a better shot at it.

He didn't have better data for sure. He has denied that he got the DK data before the FD contests started, and the DraftKings tech people have confirmed his denial based on the time-stamp on the query or whatever.

I understand that people won't take DraftKings' word for that, nor should they. We need outside, independent auditors on this thing at a minimum. (And they are coming.)

I'm just pointing out that the "for sure" part isn't an undisputed fact.

 

[Apple Jack]

Certainly crimes against taste for that hat.

 

[Maurile Tremblay]

If he was using that data to win on other sites, he's broken the law.

I think that's chet's question.

There certainly should be a law prohibiting people from doing that, but I'm not really sure there is. The mail fraud stuff from Wikipedia doesn't seem to fit because Haskell didn't publish any misleading communications -- but I know better than to try to figure out the answer to a difficult legal question by skimming a Wikipedia excerpt. We need a criminal lawyer with some experience with this kind of stuff to weigh in.

DFS is a largely unregulated industry, so there aren't the same laws against using non-public information for personal gain as there are in, say, the stock market.

 

[Doug B]

Does legality matter? Businesses can be take down (or take themselves down, as it were) by merely portraying the appearance of being unethical.

DFS might not go away ... but that doesn't necessarily mean Draft Kings and FanDuel won't eventually be the MySpace or Betamax of DFS.

 

[Sammy3469]

If he was using that data to win on other sites, he's broken the law.

I think that's chet's question.

There certainly should be a law prohibiting people from doing that, but I'm not really sure there is. The mail fraud stuff from Wikipedia doesn't seem to fit because Haskell didn't many any misleading communications -- but I know better than to try to figure out the answer to a difficult legal question by skimming a Wikipedia excerpt. We need a criminal lawyer with some experience with this kind of stuff to weigh in.

DFS is a largely unregulated industry, so there aren't the same laws against using non-public information for personal gain as there are in, say, the stock market.

Basically all they have to prove is that the act of taking the inside info was willfully used in a scheme to defraud (in this case other FD/DFS users). The interstate wire transfer just gives the federal government jurisdiction. It's not a slam dunk case since you have to prove that he knew he was defrauding others, but the wire transfers themselves would give the federal government the ability to prosecute if they did believe he defrauded others.

 

[Marauder]

Not sure any laws were broken here. There are many shark players that have programs that compile very similar data. This guy had better data for sure, but it doesn't guarantee winning, just a better shot at it.

If he was using that data to win on other sites, he's broken the law.

If Haskell was -- as he's claimed -- using that data to write the ownership % report and had queried it after lineups had locked, then not necessarily.

I don't think Haskell + ownership data is going to be the real crux of this story when it's all said and done, I think it's going to be multiple people at both big sites using insider data in multiple ways to win on the other side.

And on their own site. Anybody who thinks these guys were not playing on their own site under other peoples names has their head in the sand. Most people, if they see a chance to use insider information to make money, will do so if they think they can get away with it.

We know he had the ability to run the ownership data query prior to the DK lineups being locked because that is what he did which started this whole thing. Whether that gave him an advantage on FD, to me, misses the bigger picture. He clearly could have used that information to make money on DK and if their internal data security was lax enough that he could, most likely there were many others that could and did as well. I'm willing to bet that this is just the tip of the iceberg, similar to the potripper hand history incident that started the whole AP/UB scandal.

 

[James Daulton]

DFS can't (I mean most likely won't) survive this in its current state, can it?

 

[Good Posting Judge]

DFS can't (I mean most likely won't) survive this in its current state, can it?

I think DK and FD are actually going to survive this and still be the market leaders, but their respective houses are going to be cleaned and there's going to be a lot of regulation put in place.

 

[jonessed]

Assuming the allegations of them having the roster info and using it for their advantage are true, what laws did they break?

The individual? I suppose the company could sue them for breach of contract. I don't know what federal crimes they may have broken.

Wouldn't the companies themselves be liable for fraud if their own employees were rigging the games? I find it hard to believe that one mid-level manager went rogue and kept the information to himself.

 

[jonessed]

DFS can't (I mean most likely won't) survive this in its current state, can it?

I think DK and FD are actually going to survive this and still be the market leaders, but their respective houses are going to be cleaned and there's going to be a lot of regulation put in place.

Why wouldn't the government just do what they did with online poker? I don't see the point of the carve-out for fantasy sports anymore. Just dump it. What's the point of going out of the way to support a fledgling gambling industry? It's not worth creating the regulatory infrastructure.

 

[jonessed]

Not sure any laws were broken here. There are many shark players that have programs that compile very similar data. This guy had better data for sure, but it doesn't guarantee winning, just a better shot at it.

If he was using that data to win on other sites, he's broken the law.

If Haskell was -- as he's claimed -- using that data to write the ownership % report and had queried it after lineups had locked, then not necessarily.

I don't think Haskell + ownership data is going to be the real crux of this story when it's all said and done, I think it's going to be multiple people at both big sites using insider data in multiple ways to win on the other side.

And on their own site. Anybody who thinks these guys were not playing on their own site under other peoples names has their head in the sand. Most people, if they see a chance to use insider information to make money, will do so if they think they can get away with it.We know he had the ability to run the ownership data query prior to the DK lineups being locked because that is what he did which started this whole thing. Whether that gave him an advantage on FD, to me, misses the bigger picture. He clearly could have used that information to make money on DK and if their internal data security was lax enough that he could, most likely there were many others that could and did as well. I'm willing to bet that this is just the tip of the iceberg, similar to the potripper hand history incident that started the whole AP/UB scandal.

Exactly. There is no way this wasn't rampant. And rampant fraud in sports betting is not something the MLB or NFL is going to want to be associated with.

These guys are about to go through the investigatory meat grinder.

I don't think this is going to survive without going offshore.

 

[Tiger Fan]

Assuming the allegations of them having the roster info and using it for their advantage are true, what laws did they break?

IP theft and/or mail fraud would be the easy ones if I had to guess.

Mail fraud?

I'm not a lawyer, but IP theft seems a stretch.

Your wiki definition:

There are three elements to mail and wire fraud:

1. Intent;
2. A "scheme or artifice to defraud" or the obtaining of property by fraud; and,
3. A mail or wire communication.[4]

To be fraudulent, a misrepresentation must be material.[5]

Mail fraud applies only to United States domestic mailings and use of interstate carriers (UPS, FedEx) which must originate in one state, and successfully terminate pursuant to the address label inside another state, a transportation that is termed "interstate" (over which Congress has power to regulate) and does require that the mailing cross at least one state line into another state; wire fraud has been expanded by Congress to include foreign wire communication or interstate connections via (e.g.) an e-mail server or telephone switch or radio communication

So I can have my buddy arrested for mail/wire fraud for lowballing me a FF trade? Sweet

 

[Willie Neslon]

There's a game within the game

 

[Doug B]

DFS can't (I mean most likely won't) survive this in its current state, can it?

I think DK and FD are actually going to survive this and still be the market leaders, but their respective houses are going to be cleaned and there's going to be a lot of regulation put in place.

No chance a third party builds a better (more honest-looking) mousetrap, and quickly erodes DK/FD's market share?

I do know the Big Two have huge investors that hate failing ... so, yeah, there's that.

 

[Doug B]

I don't see the point of the carve-out for fantasy sports anymore. Just dump it. What's the point of going out of the way to support a fledgling gambling industry? It's not worth creating the regulatory infrastructure.

While I agree with you ... how does that loophole get closed now? Who's motivated to sneak that provision onto the next can't-miss military funding bill (or whatever)?

(And really, why can't all of this be done way above-board and uber-publically? Really? Gotta sneak this stuff onto completely unrelated bills? Really? And they're excuse is "everyone does it"? Really?)

 

[Good Posting Judge]

DFS can't (I mean most likely won't) survive this in its current state, can it?

I think DK and FD are actually going to survive this and still be the market leaders, but their respective houses are going to be cleaned and there's going to be a lot of regulation put in place.

Why wouldn't the government just do what they did with online poker? I don't see the point of the carve-out for fantasy sports anymore. Just dump it. What's the point of going out of the way to support a fledgling gambling industry? It's not worth creating the regulatory infrastructure.

Because there's a ton of money behind both companies, including deals with two major sports leagues.

Poker got blindsided and didn't really have sufficient representation in DC. DFS won't have that problem. Pallone's said that they're explicitly not looking to get rid of DFS.

 

[Capella]

Feds are going to have a field day with this. Lot of interstate/RICO issues. Going to be fun to watch.

 

[bagger]

Feds are going to have a field day with this. Lot of interstate/RICO issues. Going to be fun to watch.

yup that's what I thought of immediately/ the fact that these games to over state lines is really bad news for those involve.

 

[Sammy3469]

Feds are going to have a field day with this. Lot of interstate/RICO issues. Going to be fun to watch.

yup that's what I thought of immediately/ the fact that these games to over state lines is really bad news for those involve.

NY State's Martin Act is also much broader in scope than the federal definition which is why the NY AG requesting that info the other day was such a big deal.

 

[jon_mx]

I guess technically, having a way to peek at another players hole cards isn't illegal is it? Since this industry is not well regulated, lots of unethical stuff could be going on which is not illegal.

 

[Tom Servo]

Shots fired.

 

[Ned]

Shots fired.

How exactly are we going to know this?

All persons in the United States who deposited money into a DraftKings account before Oct. 6, 2015 and competed in any contest where other entries were made by employees from DraftKings, FanDuel or any other DFS site.

 

[moleculo]

Shots fired.

How exactly are we going to know this?

All persons in the United States who deposited money into a DraftKings account before Oct. 6, 2015 and competed in any contest where other entries were made by employees from DraftKings, FanDuel or any other DFS site.

obviously, once they file a suit, there will be a discovery phase where lawyers will cross reference competition records for fanduel and draftkings employees.

 

[bicycle_seat_sniffer]

DFS can't (I mean most likely won't) survive this in its current state, can it?

I think DK and FD are actually going to survive this and still be the market leaders, but their respective houses are going to be cleaned and there's going to be a lot of regulation put in place.

Why wouldn't the government just do what they did with online poker? I don't see the point of the carve-out for fantasy sports anymore. Just dump it. What's the point of going out of the way to support a fledgling gambling industry? It's not worth creating the regulatory infrastructure.

Because there's a ton of money behind both companies, including deals with two major sports leagues.

Poker got blindsided and didn't really have sufficient representation in DC. DFS won't have that problem. Pallone's said that they're explicitly not looking to get rid of DFS.

probably not, but they should be audited like a mofo.

 

[Mr. Pickles]

Shut it all down.

 

[lumpy19]

Banning employees from playing isn't going to stop anyone - all they need is a friend/relative willing to make the bets on their account. Hell, they probably already are.

All they really need is a friend/relative to open the account and cash out the account. The employees can login and play from their phone/tablet/computer as if the account was theirs, nobody will know who is actually logged in. I doubt the DFS sites track IP addresses on account activity.

There is no doubt shady #### is going on with DK/Fanduel this year, the money is too big. Several years ago I am sure everyone was just excited to be part of a startup but now there is life changing money being paid out every single week there. Even the most straight laced guy is going to be tempted by that, especially if they see others doing it.

The current state of DFS reminds me a lot of the tech bubble back around 2000.

And figure out the accounting nightmare of the tax situation should any money be won. The friend/relative would be forced to declare the money on their taxes since the winnings are in their name. It's quite easy to avoid this in sports betting and poker...but DFS sites not so much.

Uh, friend pays taxes out of winnings, takes his % cut, give employee the rest. For $300k, I'll spend the time to work it out.

Your lack of knowledge is so cute

 

[Peyton Marino]

so should I take my $$$ out now or nah

 

[RUSF18]

Banning employees from playing isn't going to stop anyone - all they need is a friend/relative willing to make the bets on their account. Hell, they probably already are.

All they really need is a friend/relative to open the account and cash out the account. The employees can login and play from their phone/tablet/computer as if the account was theirs, nobody will know who is actually logged in. I doubt the DFS sites track IP addresses on account activity.

There is no doubt shady #### is going on with DK/Fanduel this year, the money is too big. Several years ago I am sure everyone was just excited to be part of a startup but now there is life changing money being paid out every single week there. Even the most straight laced guy is going to be tempted by that, especially if they see others doing it.

The current state of DFS reminds me a lot of the tech bubble back around 2000.

And figure out the accounting nightmare of the tax situation should any money be won. The friend/relative would be forced to declare the money on their taxes since the winnings are in their name. It's quite easy to avoid this in sports betting and poker...but DFS sites not so much.

Uh, friend pays taxes out of winnings, takes his % cut, give employee the rest. For $300k, I'll spend the time to work it out.

Your lack of knowledge is so cute

So what's he wrong about that would lead to an "accounting nightmare" like you claim?

 

[Apple Jack]

What's so complicated about one person paying taxes on a 1099 and another repaying them for it?

 

[Apple Jack]

so should I take my $$$ out now or nah

Left $100 in and Deandre Hopkins only 30% owned baby. Then again, I had to wait til kickoff to find that out.

 

[RUSF18]

What's so complicated about one person paying taxes on a 1099 and another repaying them for it?

NIGHTMARE!!!!

 

[lumpy19]

Banning employees from playing isn't going to stop anyone - all they need is a friend/relative willing to make the bets on their account. Hell, they probably already are.

All they really need is a friend/relative to open the account and cash out the account. The employees can login and play from their phone/tablet/computer as if the account was theirs, nobody will know who is actually logged in. I doubt the DFS sites track IP addresses on account activity.

There is no doubt shady #### is going on with DK/Fanduel this year, the money is too big. Several years ago I am sure everyone was just excited to be part of a startup but now there is life changing money being paid out every single week there. Even the most straight laced guy is going to be tempted by that, especially if they see others doing it.

The current state of DFS reminds me a lot of the tech bubble back around 2000.

And figure out the accounting nightmare of the tax situation should any money be won. The friend/relative would be forced to declare the money on their taxes since the winnings are in their name. It's quite easy to avoid this in sports betting and poker...but DFS sites not so much.

Uh, friend pays taxes out of winnings, takes his % cut, give employee the rest. For $300k, I'll spend the time to work it out.

Your lack of knowledge is so cute

So what's he wrong about that would lead to an "accounting nightmare" like you claim?

Have you ever filed your own taxes? Ever been audited?

Gambling winnings(which is what DFS would be considered) are complicated. If you gamble as your sole source of income there's lots of stuff that can be written off(including losses), probably the easiest scenario is you happen to have a professional gambler friend who doesn't play DFS(that should be easy to find)

If your friend has a real job....get ready to get ####ed because you can't write off anything(to the best of my knowledge). You have to claim all your winnings but can't claim any losses. In addition to taking a major hit on the victory because you can't claim any losses your friend now gets taxed in a higher bracket(unless your friend was already rich)....so that will be fun to deal with.....and your friend will also greatly increase his chances of being audited because he has this massive income spike from gambling....hope the friend has good records and never tried to sneak anything by the IRS.....cause the IRS don't give a ####, audits are ruthless.

 

[RUSF18]

Banning employees from playing isn't going to stop anyone - all they need is a friend/relative willing to make the bets on their account. Hell, they probably already are.

All they really need is a friend/relative to open the account and cash out the account. The employees can login and play from their phone/tablet/computer as if the account was theirs, nobody will know who is actually logged in. I doubt the DFS sites track IP addresses on account activity.

There is no doubt shady #### is going on with DK/Fanduel this year, the money is too big. Several years ago I am sure everyone was just excited to be part of a startup but now there is life changing money being paid out every single week there. Even the most straight laced guy is going to be tempted by that, especially if they see others doing it.

The current state of DFS reminds me a lot of the tech bubble back around 2000.

And figure out the accounting nightmare of the tax situation should any money be won. The friend/relative would be forced to declare the money on their taxes since the winnings are in their name. It's quite easy to avoid this in sports betting and poker...but DFS sites not so much.

Uh, friend pays taxes out of winnings, takes his % cut, give employee the rest. For $300k, I'll spend the time to work it out.

Your lack of knowledge is so cute

So what's he wrong about that would lead to an "accounting nightmare" like you claim?

Have you ever filed your own taxes? Ever been audited?

Gambling winnings(which is what DFS would be considered) are complicated. If you gamble as your sole source of income there's lots of stuff that can be written off(including losses), probably the easiest scenario is you happen to have a professional gambler friend who doesn't play DFS(that should be easy to find)

If your friend has a real job....get ready to get ####ed because you can't write off anything(to the best of my knowledge). You have to claim all your winnings but can't claim any losses. In addition to taking a major hit on the victory because you can't claim any losses your friend now gets taxed in a higher bracket(unless your friend was already rich)....so that will be fun to deal with.....and your friend will also greatly increase his chances of being audited because he has this massive income spike from gambling....hope the friend has good records and never tried to sneak anything by the IRS.....cause the IRS don't give a ####, audits are ruthless.

Next time just don't respond.

It's a 1099 just like a ton of other people deal with all the time. You're making it needlessly complicated to justify your original hyperbole, which you double down on by screaming "OMG AUDIT!!!".

 

[Sammy3469]

Banning employees from playing isn't going to stop anyone - all they need is a friend/relative willing to make the bets on their account. Hell, they probably already are.

All they really need is a friend/relative to open the account and cash out the account. The employees can login and play from their phone/tablet/computer as if the account was theirs, nobody will know who is actually logged in. I doubt the DFS sites track IP addresses on account activity.

There is no doubt shady #### is going on with DK/Fanduel this year, the money is too big. Several years ago I am sure everyone was just excited to be part of a startup but now there is life changing money being paid out every single week there. Even the most straight laced guy is going to be tempted by that, especially if they see others doing it.

The current state of DFS reminds me a lot of the tech bubble back around 2000.

And figure out the accounting nightmare of the tax situation should any money be won. The friend/relative would be forced to declare the money on their taxes since the winnings are in their name. It's quite easy to avoid this in sports betting and poker...but DFS sites not so much.

Uh, friend pays taxes out of winnings, takes his % cut, give employee the rest. For $300k, I'll spend the time to work it out.

Your lack of knowledge is so cute

So what's he wrong about that would lead to an "accounting nightmare" like you claim?

Have you ever filed your own taxes? Ever been audited?

Gambling winnings(which is what DFS would be considered) are complicated. If you gamble as your sole source of income there's lots of stuff that can be written off(including losses), probably the easiest scenario is you happen to have a professional gambler friend who doesn't play DFS(that should be easy to find)

If your friend has a real job....get ready to get ####ed because you can't write off anything(to the best of my knowledge). You have to claim all your winnings but can't claim any losses. In addition to taking a major hit on the victory because you can't claim any losses your friend now gets taxed in a higher bracket(unless your friend was already rich)....so that will be fun to deal with.....and your friend will also greatly increase his chances of being audited because he has this massive income spike from gambling....hope the friend has good records and never tried to sneak anything by the IRS.....cause the IRS don't give a ####, audits are ruthless.

You may deduct gambling losses only if you itemize deductions. However, the amount of losses you deduct may not be more than the amount of gambling income reported on your return. Claim your gambling losses on Form 1040, Schedule A (PDF) as an "Other Miscellaneous Deduction" (line 28) that is not subject to the 2% limit. A nonresident alien of the United States cannot deduct gambling losses.

 

[lumpy19]

Banning employees from playing isn't going to stop anyone - all they need is a friend/relative willing to make the bets on their account. Hell, they probably already are.

All they really need is a friend/relative to open the account and cash out the account. The employees can login and play from their phone/tablet/computer as if the account was theirs, nobody will know who is actually logged in. I doubt the DFS sites track IP addresses on account activity.

There is no doubt shady #### is going on with DK/Fanduel this year, the money is too big. Several years ago I am sure everyone was just excited to be part of a startup but now there is life changing money being paid out every single week there. Even the most straight laced guy is going to be tempted by that, especially if they see others doing it.

The current state of DFS reminds me a lot of the tech bubble back around 2000.

And figure out the accounting nightmare of the tax situation should any money be won. The friend/relative would be forced to declare the money on their taxes since the winnings are in their name. It's quite easy to avoid this in sports betting and poker...but DFS sites not so much.

Uh, friend pays taxes out of winnings, takes his % cut, give employee the rest. For $300k, I'll spend the time to work it out.

Your lack of knowledge is so cute

So what's he wrong about that would lead to an "accounting nightmare" like you claim?

Have you ever filed your own taxes? Ever been audited?

Gambling winnings(which is what DFS would be considered) are complicated. If you gamble as your sole source of income there's lots of stuff that can be written off(including losses), probably the easiest scenario is you happen to have a professional gambler friend who doesn't play DFS(that should be easy to find)

If your friend has a real job....get ready to get ####ed because you can't write off anything(to the best of my knowledge). You have to claim all your winnings but can't claim any losses. In addition to taking a major hit on the victory because you can't claim any losses your friend now gets taxed in a higher bracket(unless your friend was already rich)....so that will be fun to deal with.....and your friend will also greatly increase his chances of being audited because he has this massive income spike from gambling....hope the friend has good records and never tried to sneak anything by the IRS.....cause the IRS don't give a ####, audits are ruthless.

Next time just don't respond.

It's a 1099 just like a ton of other people deal with all the time. You're making it needlessly complicated to justify your original hyperbole, which you double down on by screaming "OMG AUDIT!!!".

Maybe I am....my knowledge comes from the sports betting side(I need to provide all my own proof of wins/losses)....if the DFS sites provide the paperwork maybe it's not a nightmare.

 

[Ned]

So the only logical explanation is that lumpy is an alien?!

 

[Peyton Marino]

Banning employees from playing isn't going to stop anyone - all they need is a friend/relative willing to make the bets on their account. Hell, they probably already are.

All they really need is a friend/relative to open the account and cash out the account. The employees can login and play from their phone/tablet/computer as if the account was theirs, nobody will know who is actually logged in. I doubt the DFS sites track IP addresses on account activity.

There is no doubt shady #### is going on with DK/Fanduel this year, the money is too big. Several years ago I am sure everyone was just excited to be part of a startup but now there is life changing money being paid out every single week there. Even the most straight laced guy is going to be tempted by that, especially if they see others doing it.

The current state of DFS reminds me a lot of the tech bubble back around 2000.

And figure out the accounting nightmare of the tax situation should any money be won. The friend/relative would be forced to declare the money on their taxes since the winnings are in their name. It's quite easy to avoid this in sports betting and poker...but DFS sites not so much.

Uh, friend pays taxes out of winnings, takes his % cut, give employee the rest. For $300k, I'll spend the time to work it out.

Your lack of knowledge is so cute

So what's he wrong about that would lead to an "accounting nightmare" like you claim?

Have you ever filed your own taxes? Ever been audited?

Gambling winnings(which is what DFS would be considered) are complicated. If you gamble as your sole source of income there's lots of stuff that can be written off(including losses), probably the easiest scenario is you happen to have a professional gambler friend who doesn't play DFS(that should be easy to find)

If your friend has a real job....get ready to get ####ed because you can't write off anything(to the best of my knowledge). You have to claim all your winnings but can't claim any losses. In addition to taking a major hit on the victory because you can't claim any losses your friend now gets taxed in a higher bracket(unless your friend was already rich)....so that will be fun to deal with.....and your friend will also greatly increase his chances of being audited because he has this massive income spike from gambling....hope the friend has good records and never tried to sneak anything by the IRS.....cause the IRS don't give a ####, audits are ruthless.

Next time just don't respond.

It's a 1099 just like a ton of other people deal with all the time. You're making it needlessly complicated to justify your original hyperbole, which you double down on by screaming "OMG AUDIT!!!".

Maybe I am....my knowledge comes from the sports betting side(I need to provide all my own proof of wins/losses)....if the DFS sites provide the paperwork maybe it's not a nightmare.

The sites send you a separate form if you win over a certain amount. It's pretty painless aside from the part where you pay more taxes. The stuff about bumping into a higher tax bracket, not being able to claim losses from other sites (it's quite likely that you lost on some sites and won on others if you play on enough), and increasing probability of audit have some merit IMO. I don't think it would be as easy as some are making it seem.

 

[Ned]

Ned,

As the three co-founders of DraftKings, we want to speak to you directly about what has been going on.

We know that you play DraftKings because it's fun and because it gives you a chance to showcase your skills against millions of other fans, and we know that you cannot do that without a level playing field.

The fairness and integrity of our contests has been at the heart of everything we have built since we started the company three and a half years ago.

Over the past week, questions have arisen around an employee of ours who won a significant prize on a competitor's site. While our internal investigation has reflected absolutely no wrongdoing on his part, this has still pushed us to reevaluate our processes.

Long before this happened, the wheels were in motion for an external review of our policies and procedures. Given the pace of our growth, we felt that an audit was critical to ensure the security of our platform, so we hired an external law firm experienced with these issues to conduct a full review.

But that is not enough. In addition to this audit, we have put in place a set of core measures that we believe are central to this process:

• We expanded our existing policy prohibiting DraftKings employees from playing on our site to prohibit participation in any public daily fantasy sports contests for money.
• We also will prohibit employees from any other Daily Fantasy Sports contest operator from participating in games on DraftKings.
• We are actively reviewing our organizational structure and will add resources to ensure compliance with all recommendations stemming from internal and external findings.
• We are working with multiple third parties to strengthen all internal policies and procedures.

The events of the past week have caused us to take a broader look and to ask those both here and externally to widen the scope of their analysis of our business.

We are aware that there is room for growth, regardless of the strength of our current platform. We will work tirelessly to improve all aspects of our customer experience, which is every bit as important to us as the effort we put into our product.

You will no doubt continue to hear from the media about both DraftKings and the industry. It is our prerogative to keep driving that conversation ourselves. We will work to respond to your concerns in complete transparency and to inform you of the steps we are taking to inspire your full trust.

Please know how grateful we are for the passion and loyalty you have shown DraftKings throughout our history and especially over the past week. You remain our greatest priority.

Thank you,

Jason Robins, Matt Kalish & Paul Liberman

Co-Founders, DraftKings

 

[elbowrm]

I pulled my money out of Fd and yesterday they miraculously entered me into a free roll for a Porsche.

 

[Marauder]

I bet that Haskell dude is not very popular around the DK offices these days.

 

[Doug B]

Shots fired.

How exactly are we going to know this?

All persons in the United States who deposited money into a DraftKings account before Oct. 6, 2015 and competed in any contest where other entries were made by employees from DraftKings, FanDuel or any other DFS site.

Ask them? Data mining might not be strictly necessary to establish which contests DFS employees entered, though it will certainly be done anyway.

Legal strategy: any and all FanDuel/Draft Kings employees MUST dodge like crazy under oath in depositions or in court, correct? Or else the case is essentially a foregone conclusion if they're wide open, right?

Lawyers often say they don't advise their clients to lie ... but these DFS employees certainly can't be at all open and forthcoming, can they?

 

[Ramblin Wreck]

I pulled my money out of Fd and yesterday they miraculously entered me into a free roll for a Porsche.

Same here. Wonder which DK employee's wife will win the car.

 

[Willie Neslon]

I bet that Haskell dude is not very popular around the DK offices these days.

I guess they have employee dorms at the office where some of them sleep. They released video from a few nights ago.

 

[Maurile Tremblay]

The taxes aren't that difficult.

If I'm banned from playing on DK and therefore play under my mom's account, my mom will get 1099ed for "her" winnings and then either I can reimburse her for her tax liability or she can 1099 me for my share of "our" winnings. Either way, not a real deterrent to such an arrangement.