In a dramatic episode of ESPN show Outside the Lines, the sports media giant not only made clear that it was limiting its association with DraftKings, but also did a deep dive into some of the details surrounding the daily fantasy scandal that has embroiled the industry’s two leading companies.
The scandal was initially triggered by the discovery that a DraftKings employee not only had access to proprietary lineup information before customers, but was also winning large sums of money on FanDuel (DraftKings’ similarly structured competitor). In Tuesday’s OTL episode, sports business reporter Darren Rovell revealed on air that he was given the exact percentage of total FanDuel prizes that have been won by DraftKings employees:
FanDuel has provided me with the percentage of DraftKings employees, the money that DraftKings employees have won in their entire site history. FanDuel spokesperson Justine Sacco tells me that their data shows that DraftKings employees have won 0.3 percent of the money. Now, whether that’s a big number or not, we’re just trying to figure that out. FanDuel has given out in prizes close to $2 billion, according to my calculations. So that would be less than $10 million total.
If the prizes have been $2 billion, than 0.3 percent is $6 million.
As was quickly pointed out, that doesn’t necessarily mean that DraftKings employees have pocketed all $6 million in winnings. That number could be (and most likely is) merely a total winnings statistic, which is different from “net profit.” Basically, we don’t know how much the employees lost alongside their wins.
And strikingly, DraftKings has made little effort in the past to hide the fact that employees play plenty of daily fantasy. As the Boston Globe recently noted, DraftKings founder Paul Lieberman freely admitted as much in a speech at a Babson conference.
“We have some people who make significantly more money off of our competitors’ sites than they do working for DraftKings,” Lieberman told the group.
The idea, therefore, that (for example) Major League Baseball had no idea that daily fantasy employees were allowed to play on competitors’ sites is truly surprising. Given the amount of legal due diligence that surely went into baseball’s investment directly into DraftKings, it appears to have been a major oversight.
Image via DraftKings
