DraftKings Lineup Leak Rocks Daily Fantasy Sports Industry

[Reasonable Doubt]

http://www.legalsportsreport.com/4548/draftkings-data-leak-faq/

 

[ViRGE]

Internet gambling is rigged? Who would have thought!?

 

[CraKaJaX]

I still don't see how this is even legal at all. You can't play online poker legally, but ESPN can give the +/- for players on DraftKing and what they cost? AFAIK, this is gambling. What am I missing here?

 

[waggy]

Internet gambling is rigged? Who would have thought!?

Im always surprised when a story like this comes out. NOT because it's rigged but that people go back to online gambling.

 

[gorcorps]

Can anyone post the text? I'm curious and can't see it

 

[QueBert]

Im always surprised when a story like this comes out. NOT because it's rigged but that people go back to online gambling.

I sorta know a guy who has won around $10k on Fan Duel. As with any form of gambling the house always wins, but that doesn't mean some people don't win also. Sure it's few and far in between, but that's why it's called gambling. Is it rigged really? And even with employees possibly having inside information. If I picked the right players I'll still win.

 

[CraKaJaX]

Can anyone post the text? I'm curious and can't see it

Not sure how well it'll come out, but:

The leaking of player lineup data at DraftKings has sparked a community-wide conversation spanning employee access to player data, game integrity, and the effectiveness of quasi-self-regulation in the DFS industry.
Below is a collection of what’s known, answers to common questions, and potential implications around the #DKLeak.
DFS Report was first to report on the issue, which was originally noted in a Rotogrinders thread. We are awaiting comment from DraftKings.
Contact us with anything you think should be added. Story will be updated as warranted.
The story, in a nutshell
Here are the broad strokes of #DKLeak:
Last week, a DraftKings employee inadvertently released data regarding DraftKings’ biggest contest — the Millionaire Maker — prior to the start of all the NFL games involved in the contest.
The data showed the prevalence of particular players across all submitted lineups for the contest. For instance, in this example, Patriots wide receiver Julian Edelman was the most common player selected, appearing in 37 percent of the lineups that were entered.
This kind of data is posted regularly, but never until all games in a given contest have started and all lineups are finalized.
Access to this kind of data prior to the start of a contest would provide a DFS player with a massive edge over players lacking such data.
Employees at DFS operators are not prohibited from playing at other DFS sites. To wit: the person who posted the DraftKings data early — DraftKings written content manager Ethan Haskell — won $350,000 at FanDuel the week of the data leak.
There is no indication, evidence, or formal accusation that Haskell’s win is in any way related to his access to data, nor is there proof that Haskell had access to data at a point that would have provided him with an advantage. Haskell and others have denied any wrongdoing. But the mere optics of the situation are driving some of the broader concerns.
Players and observers are now raising questions about exactly who inside DFS operators has access to competitively valuable data, what safeguards are in place to prevent abuse, and whether the industry’s self-regulatory approach is sufficient to identify and mitigate these and similar threats.
How does access to ownership data provide an edge?
Ownership percentage is one piece of the puzzle that can be useful in skillfully setting DFS lineups, especially in guaranteed prize pool contests. Top players try to predict ownership percentages, and data about past ownership percentages can be dissected for information.
Because of the massive number of entries in the biggest contests at DraftKings and FanDuel — hundreds of thousands — it’s usually difficult to win a contest with a lot of players that are commonly owned. Rostering some players with low ownership percentages and a high upside is a strategy that many players employ.
Ed Miller, an independent games consultant who has written frequently about DFS, says that it’s difficult to overstate the value of lineup data.
“If you knew beforehand which players would be most used, in the major sports you can build +EV (positive expected value) cash game and GPP lineups based almost solely on that knowledge,” Miller told Legal Sports Report.
Why the question of access to insider data is a critical one
First and foremost, should the data in question be available at all? As DFS Report put it:
If this sort of information is stored in advance like this who is to say that the data isn’t available to someone 5 minutes before kickoff of games or 10 minutes before the kickoff or even an hour before the initial kickoff. My point is if the data can be accessed in advance then it is not hard to see it could easily be accessed at other points in advance even before the tournament is live.
If the data is made available, the questions looming over DraftKings – and all operators – include:
Which staff members, and how many, are seeing data like this or have access to it?
What other data could these employees access that would be of use in setting lineups?
What precautions are being taken to keep the data from leaking?
The threat of “insider trading”
Even if a DFS site employee is not playing DFS (at his or her site, or elsewhere) this data would be extremely valuable to professional DFS players.
If illicitly released by an employee, you’d be looking at a scenario that is functionally the equivalent of insider trading on the stock market, a point not lost on sports and gaming attorney Daniel Wallach:
With too many employees presumably having access to this inside information, it raises the specter of insiders using this non-public information to gain an edge when they play similar contests for big money on other sites.
At a minimum, DFS employees and insiders should be restricted from playing on any site (not just their own), and access to this type of information should be limited only to the most essential of personnel. If it’s too easily accessible to most employees, the risk and suspicion of insider profiteering will not go away anytime soon.
Do DFS operators have a clear policy on employee play at other DFS sites?
Employees of DFS sites absolutely do play DFS at other sites.
We are not aware of any DFS company that has a blanket policy prohibiting employees from playing on other DFS sites.
Anecdotally, the amount of cross-site play by operator employees is substantial.
One industry insider who wished to remain anonymous told LSR that “a significant number of the whales at the top DFS sites are employees – often executives – of other sites.”
(From a DFS operator’s point of view, a “whale” is simply a high-volume player that generates significant revenue, not necessarily a winning or losing player.)
The policy on the matter at DraftKings appears to be murky to its employees, at least based on the following exchange between a DraftKings developer and Bob Voulgaris on Twitter:
Unless there’s an error in Hester’s reply or some sort of broader context, it appears that, by Hester’s understanding of DraftKings’ internal policy, Haskell should not have been able to both have access to the lineup data and play at FanDuel.
Where the story intersects with the issue of regulation
Daily fantasy sports currently occupies a legal space that allows it to exist outside of the regulatory umbrella that covers conceptually similar products like parimutuel horse wagering, poker, and sportsbetting.
As a result, the industry is functionally self-regulated when it comes to the finer points of operation. The upshot:
There are no formal, industry-wide rules governing this particular situation.
There is no transparency regarding the nature of the situation.
There is no guarantee of accountability.
There is no body actively working to craft policy that would prevent future conflicts from arising.
As Seth Young, COO of Star Fantasy Leagues, noted to LSR, “brick and mortar groups in a regulated environment have tight controls on who can access what data. We always talk about how we have been built to address things like this, and other concerns of gaming regulators, etc. There’s a reason this stuff doesn’t come out of our camp, and it’s not because of player numbers.”
“This is, however, another case in point why we license and control our technology,” Young added. “Knowing what I know, I’m not sure how this sort of thing happens by accident, or how deep this integrity issue goes.”
Two other key issues deserve additional consideration.
The need for an impartial source
Right now, the only source for definitive information is DraftKings. So your position on the truth of the situation fundamentally pivots on whether you believe DraftKings or not.
In a regulated environment, a third party, likely the government, would be overseeing issues of game integrity, access to data, and the like.
Should DraftKings — or any other DFS site — be the sole arbiter of the integrity of its own internal systems?
What we don’t know in the absence of regulation
In the absence of an external oversight function, here are some critical questions stemming from the data leak issue that we’ll never have certainty regarding:
What is the policy sites have regarding employee play at their home site and employee play at other sites?
How is the policy enforced?
How many instances have their been where the policy was broken? How many accusations or investigations?
What was the investigative process for determining whether a policy violation took place?
How many people have access to competitively sensitive data?
What percentage of employees / executives from one site have active accounts at other sites?
When a player hits a big score at a site, does the site investigate him or her for links to employees at the site?
When is a self-regulatory body not a self-regulatory body?
The FSTA – the primary trade group for the DFS industry – does have a “Paid Entry Contest Operator Charter” that serves as the only outside oversight for companies in the DFS industry. The charter includes a section dedicated to game integrity:
Player Protection
The signatory company will ensure employees or other persons connected to the company with access to confidential player information (such as line-ups) will not:
Play on their own games (apart from for testing purposes or in private leagues)
Use confidential player information to gain an advantage playing against players on a different site
Share confidential player information (such as win rate) to anyone outside of the company
Note that the FSTA considers lineups to be “confidential player information” and that the leak appears to be a clear violation of the FSTA charter.
But what’s actually behind the policy? The FSTA itself makes it clear that the body isn’t meant to serve as an enforcement apparatus. From the charter:
Conforming with the above should not be viewed as compliance with the law, and the FSTA is in no way certifying such compliance of member companies. Companies should procure and adhere to legal advice regarding their games from skilled, experienced counsel of their choice
The FSTA is not undertaking to audit or regulate member companies. Rather, this code is designed to foster proper behavior and allow the FSTA to exercise discretion and take action if it so chooses should it learn that a member company is not adhering to the principles set forth above.
Also, if you violate the charter, the only penalty would be no longer having membership in the FSTA, which is nowhere near what the penalty would be for an infraction regarding game integrity that would result under regulation.
FSTA board members include the CEOs of DraftKings and FanDuel.
Reaction from DraftKings and the Fantasy Sports Trade Association
Legal Sports Report has reached out for comment to both DraftKings and the FSTA.
DraftKings
So far, the only official reaction to this story has come via the RotoGrinders thread, where DraftKings co-founder Matt Kalish told RotoGrinders that a statement would be coming on Monday regarding this incident. More from RG’s Cal Spears:
Kalish told me the statement Monday will detail how this information is currently protected from employees. It will also detail new policies for employess playing on other sites that will make everyone much more comfortable.
Will Hester, whose Linkedin identifies him as a software developer at DraftKings, has made various comments on the situation via Twitter.
FSTA
The FSTA has yet to respond on the record to our request for comment.
Did Haskell have early access to data that impacted his win at FanDuel?
RotoGrinders founder Cal Spears reported that Haskell did not have access to the data before setting his lineup at FanDuel. Here is his post from the RG thread, which included an update from Saturday:
There is a narrative running on Twitter that Ethan had access to this data before lineups locked and used it to play on Fanduel. From what I’m told he received the ownership report well after lineups locked on Fanduel. There is plenty of merit in a debate about site employees playing on different sites, but we need to base that debate in reality. Ethan was not using this data to pick his week 3 teams on Fanduel, he was writing about this data for DK Playbook after his week 3 teams on Fanduel had already locked.
Spears said he also confirmed with DraftKings co-founder Matt Kalish that the data that Haskell had access to was issued too late to be of use at FanDuel.

 

[s0me0nesmind1]

I don't really see the big issue here... When it comes to fantasy football, a lot of times you decide to pick-up players based on how other people are doing. You are able to look at how many people picked that player up in the last week in order to see there is a sudden rush to get that player (e.g. main starter RB was injured last week, hence the back-up will be likely starting). It's no different than when they have 3x the payout if <insert shitty team here> wins vs. 1x payout If the New England Patriots win.

Having the ability to see what the majority of people are picking doesn't mean that player is going to be any better. Plus there are plenty of sports websites that talk about fantasy and gambling, and that is "expert opinions" as well.

Or am I failing to see what is so wrong about this?

 

[gorcorps]

Not sure how well it'll come out, but:

interesting, thanks

 

[waggy]

I don't really see the big issue here... When it comes to fantasy football, a lot of times you decide to pick-up players based on how other people are doing. You are able to look at how many people picked that player up in the last week in order to see there is a sudden rush to get that player (e.g. main starter RB was injured last week, hence the back-up will be likely starting). It's no different than when they have 3x the payout if <insert shitty team here> wins vs. 1x payout If the New England Patriots win.

Having the ability to see what the majority of people are picking doesn't mean that player is going to be any better. Plus there are plenty of sports websites that talk about fantasy and gambling, and that is "expert opinions" as well.

Or am I failing to see what is so wrong about this?

from my understanding..

well if you have guy A who 95% picked and has a great game you are getting a lower payout.

IF you have Guy B who 5% picked and has a great game you are getting a HUGE payout.

so knowing how many picked a player can lead to higher payout


edit: forgot to add. The only people getting this information is employees. So this is kinda like insider trading. they are gaining a edge over other betters.

 

[Xonim]

So like, if this could cause the government to step in and shut these guys down, I'd be so happy. I'm not sure how many more weeks of Fan Duel and DraftKings commercials I can take.

 

[ElFenix]

So like, if this could cause the government to step in and shut these guys down, I'd be so happy. I'm not sure how many more weeks of Fan Duel and DraftKings commercials I can take.

no shit.

the NFL sued the state of delaware to prevent the state from allowing casino sportsbooks from taking bets on NFL games, but then happily partners with a daily fantasy gambling site. i'm guessing delaware wouldn't be infesting my TV with shitty ads.

 

[VirtualLarry]

I'll be the first to admit, that I don't quite "get" Fantasy sports leagues. I understand even less how this is gambling, or how one would make money off of it.

Are the players on your team, like cards in a hand? And how do the games play out? They have some sort of sports simulation?

 

[Homerboy]

I'll be the first to admit, that I don't quite "get" Fantasy sports leagues. I understand even less how this is gambling, or how one would make money off of it.

Are the players on your team, like cards in a hand? And how do the games play out? They have some sort of sports simulation?

You gain points based on the performance of you players. Rules vary from league to league and sport to sport, but say if Aaron Rodgers throws a TD, and you have him on your team, you get 6pts. If Lynch runs for a TD, and he's on your team, you get 6pts.

You play against another fantasy roster, and the team with the most points wins.

 

[ControlD]

I'll be the first to admit, that I don't quite "get" Fantasy sports leagues. I understand even less how this is gambling, or how one would make money off of it.

Are the players on your team, like cards in a hand? And how do the games play out? They have some sort of sports simulation?

Regular fantasy sports leagues and the daily leagues such as Draft Kings are quite different.

In regular fantasy, you draft a team before the season starts and those players you draft can only be on your team. So, you build a team of players and the other teams in your league (usually 10-16 teams total) do the same. You then score points each week based on the performance of those players in the real games that they play. You generally play head-to-head against another team in the league each week and the team with the best record at the end of the season wins.

A site like Draft Kings sets a player "salary" based basically on how good they are. So a good QB like Aaron Rogers might be worth $10,000. You have a certain amount of money to allocate to your team so you have to make choices on who to put on your roster every week while still not going over how much you have to allocate. Unlike normal fantasy, the players are not restricted to being on only one roster. Like normal fantasy, points are earned based on the real world performance of the player in that week's games. You generally play one week games and the person that scores the most points wins.

 

[pete6032]

So like, if this could cause the government to step in and shut these guys down, I'd be so happy. I'm not sure how many more weeks of Fan Duel and DraftKings commercials I can take.

Haha I totally agree. Fantasy betting commercials are overrunning the games.

 

[Attic]

Sooner Draft Kings and Fan Duel go the way of the Dodo, the better.


These outfits scream fraud and deception to entangle young gullible males with big egos and shit for brains. It's been terribly unfortunate someone backed Draft Kings with enough chedder to allow for the absolute lambasting of sports games with the incessant drivel of the marketing barrage that's been undertaken.

 

[Brian Stirling]

I was just thinking about this the other day as I watched yet another Fanduel ad while watching ESPN. I would not be surprised at all if the insider info leaked beyond the employees of the betting site and wouldn't gasp if ESPN and the NFL are mired in this mess.

One of the ads for Fanduel indicated they expect to pay out over $2B this year -- two billion! Me thinks there a crap ton of temptation in there somewhere.


Brian

 

[TheGardener]

Fantasy football has been around for several decades. But now it is becoming big business with ESPN and the NFL endorsing (maybe indirectly) them. So the government is looking at this. Massachusetts and Congress. They want their fair share.... for the people, of course.

http://www.eagletribune.com/news/ma...cle_d8e254db-c6e1-5290-a732-35c270b54ef6.html

Massachusetts Attorney General Maura Healey, a casino opponent, is reviewing the legality of the ubiquitous Boston-based fantasy sports website Draft Kings.

Congressman Frank Pallone Jr., a New Jersey Democrat, on Monday requested the House Energy and Commerce Committee hold a hearing on the legality of fantasy sports. The congressman said an estimated 57 million people will participate in fantasy sports this year in the U.S. and Canada.

Beacon Hill lawmakers on Tuesday heard testimony on bills calling for the Massachusetts Lottery to launch online games and authorizing the Lottery to run a website featuring online skill games, including fantasy sports and poker.

 

[Zee]

i dont think this is spreading in the news wide enough to reach people who dont read every single article on the internet.

This defeats having the odds of winning. Your odds are basically whether you are competing against an insider or not.

 

[SSSnail]

What gets me is that some guy always, always manage to pick the highest point players for any week. I mean, how?? :awe:

 

[gorcorps]

i dont think this is spreading in the news wide enough to reach people who dont read every single article on the internet.

This defeats having the odds of winning. Your odds are basically whether you are competing against an insider or not.

While not entirely true, things certainly aren't in your favor. Just because a guy knows which players aren't getting picked often doesn't mean the ones he goes with will actually have the big days they're hoping for.

 

[SP33Demon]

The solution is simple, make the inside access of ownership percentages public and in real-time. For example, if Marvin Jones is only set to start in 6% of lineups, show those stats so people who want a longshot contrarian play can do it. When people hit refresh, Jones' % would then rise to say 15%. So on and so forth with all players in the NFL. Then everyone knows what % is starting who and can then make a contrarian longshot play at the last second before lineups are set. It will also keep things fair since nobody, not even the employees, will know what the final percentages are but only guesstimates until all lineups are set.

 

[GagHalfrunt]

Im always surprised when a story like this comes out. NOT because it's rigged but that people go back to online gambling.

You're forgetting the simple fundamental truth of the actions of addicts. Gambling junkies are the same as substance junkies. It doesn't matter whether it's smoking, drinking, heroin or gambling, the addict will keep doing it because he/she is too weak to stop. Knowing that it's self-destructive and that there's no way to win doesn't matter to an addict.

 

[Fingolfin269]

For those that didn't read the article...

1) Data was leaked by a guy at Draft Kings (accident)
2) Draft Kings employees can't play Draft Kings but could play competitor leagues (Fan Duel)
3) Guy who leaked the data in #1 played Fan Duel that week.
4) Guy won $350k at Fan Duel
5) Obvious... Profit?

Makes me wonder what % of DK winners are from competitor's who might use data on their site to gain a competitive edge and vice versa.