FBI agents from the Boston office have been contacting customers of DraftKings Inc. to ask them about their experiences with the Boston-based company, one person familiar with the matter said.

The probe is in the preliminary stage, two people said. It is part of an ongoing discussion within the Justice Department about the legality of daily fantasy sites, in which customers pay entry fees to draft virtual sports teams that compete against each other for prize money based on the real-world performances of athletes. Congress in 2006 prohibited financial companies from transferring money to online gambling sites and several were shut down. But so-called games of skill were exempted. Fantasy-sports sites have since operated under that exemption. So-called daily fantasy sites like DraftKings and FanDuel, Inc. didn’t become popular until after the law was enacted.

The Justice Department is trying to determine whether daily fantasy games are a form of gambling that falls outside the purview of the exemption. No decision on the matter has been reached, these people said.

Hundreds of millions of dollars in venture capital and player money are flowing into the booming fantasy-sports industry, which counts sports leagues, Alphabet Inc. ’s investing arm, and major media companies such as Comcast Corp. and 21st Century Fox Inc. among its investors. Wall Street Journal-owner News Corp and 21st Century Fox were part of the same company until 2013. Walt Disney Co. earlier this year scuttled a planned investment in DraftKings, though the companies maintain a marketing relationship.

Daily fantasy came under scrutiny after a DraftKings employee admitted on a fantasy-sports message board last week that he had prematurely released sensitive data about the site’s biggest contest. The same week, he won $350,000 on FanDuel, something both companies acknowledge. DraftKings said the leak was an accident, and both companies said he didn’t benefit from having early access to data.
Advertisement

FanDuel has hired an outside investigator to conduct an internal review and make recommendations on how to strengthen controls on sensitive information. DraftKings has hired an investigator to look into unspecified allegations against an employee.

“It is entirely predictable that the government would follow up on the misleading reports about our industry,” a DraftKings spokeswoman said in a statement. “We have no knowledge of the specifics of any federal investigation but strongly disagree with any notion that our company has engaged in any illegal activities.”

FanDuel has said daily fantasy is a game of skill, not luck, and is therefore exempt under the 2006 law.

The New York Attorney General’s office has asked both companies for a raft of internal data including the win/loss records of players, algorithms that determine the fantasy pricing for athletes and details on their policies to prevent fraud. The companies have until Thursday to respond.

The Massachusetts Attorney General’s office is in talks with both companies over putting in place proper consumer protections, according to a person familiar with the discussions.

Hint - Bitcoin is going to start to do to money what the net did to information and just in time.
Regardless of success or failure of Bitcoin specifically, the tech is here...
Get your popcorn.

holfresh wrote:

earthmansurfer wrote:Decentralize it like Bitcoin/torrent. Use Bitcoin as the currency.
Governments and banks are in for a difficult next few year with the decentalized tech that is here
And it is going to be fun to watch. Gotta love disruptive technology.

Hint - Bitcoin is going to start to do to money what the net did to information and just in time.
Regardless of success or failure of Bitcoin specifically, the tech is here...
Get your popcorn.

Wasn't the head of a Bitcoin exchange using people's usernames to steal close to 400 million dollars in Bitcoin currency?..Silk Road had a major online drug business using Bitcoin as it currency before the owner got arrested?

Don't confuse the first Bitcoin exchange (ever) with the underlying technology. They are two different things. Weaknesses lie at exchange points, at least early on. But now some insured and regulated exchanges are popping up and multi signature technology will all bur stop any chance of stealing funds.

The beautiful thing, one of many, is that Bitcoin the money, is just one of a torrent of applications coming to the underlying blockchain.

Good real money is fungible. The US government tried crippling Wikileaks by putting pressure on Visa, MC, Paypal, etc. to stop funding. bitcoin saved them.

We clearly need a money for the Net and people alike that is beyond the mostly corrupt States control to inflate it away, fund wars, make politcal statements, etc. Silk road has been replaced by tens of online dark drug markets. The war on people, I mean consciousness, I mean drugs, needs to end (and with Cannabis, it is finally happening.) education to all, Treatment to those who need it, not the prison industrial system.

holfresh wrote:

earthmansurfer wrote:

holfresh wrote:

earthmansurfer wrote:Decentralize it like Bitcoin/torrent. Use Bitcoin as the currency.
Governments and banks are in for a difficult next few year with the decentalized tech that is here
And it is going to be fun to watch. Gotta love disruptive technology.

Hint - Bitcoin is going to start to do to money what the net did to information and just in time.
Regardless of success or failure of Bitcoin specifically, the tech is here...
Get your popcorn.

Wasn't the head of a Bitcoin exchange using people's usernames to steal close to 400 million dollars in Bitcoin currency?..Silk Road had a major online drug business using Bitcoin as it currency before the owner got arrested?

Don't confuse the first Bitcoin exchange (ever) with the underlying technology. They are two different things. Weaknesses lie at exchange points, at least early on. But now some insured and regulated exchanges are popping up and multi signature technology will all bur stop any chance of stealing funds.

The beautiful thing, one of many, is that Bitcoin the money, is just one of a torrent of applications coming to the underlying blockchain.

Good real money is fungible. The US government tried crippling Wikileaks by putting pressure on Visa, MC, Paypal, etc. to stop funding. bitcoin saved them.

We clearly need a money for the Net and people alike that is beyond the mostly corrupt States control to inflate it away, fund wars, make politcal statements, etc. Silk road has been replaced by tens of online dark drug markets. The war on people, I mean consciousness, I mean drugs, needs to end (and with Cannabis, it is finally happening.) education to all, Treatment to those who need it, not the prison industrial system.

It doesn't matter what new medium pops up, it's exploitable and will be exploited in one manner or the other...You find yourself running from one devil an into the arms of another..Better the devil I know...The are firms who write algorithm found on all the exchanges of Wall Street that has changed the very nature of trading in a heavily regulated and monitored industry that are now writing algorithm to exploit the inefficiencies of unregulated and little monitored places like Draft Kings, etc. We are talking 100s of millions of dollars involved..Regular guys can't compete no matter where you turn...If governments at the forefront of hacking are being hacked, then everyone is vulnerable..They found a way to plant a virus to derail and do major damage to Iran's centrifuges from far away and they aren't even connected to the internet, and for that particular reason...Technology is a two edge sword...It's great, but beware..

6 years on the internet and not really hacked but 1 time (and I'm not talking about Gox, I'm talking about the actual BTC.) That should tell you something.
Sorry, I'm a finance and technology expert. I'll go with my years of experience regarding what I know.
No offense to you, but it is clear you don't understand the technology by what you write.
There is a reason it is called disruptive and a Black Swann. Don't judge it by the price though, you'll miss the main thing... (figure that out.)
If you take away anything from this conversation let it be this:
It doesn't matter if BTC the money fails, the cat is now out of the bag. This technology is just starting. Think of it as a new Internet protocol, another layer.

http://www.huffingtonpost.com/entry/draftking-fanduel-shutdown_56203177e4b06462a13b82cf?ir=Sports&section=sports&utm_campaign=101515&utm_medium=email&utm_source=Alert-sports&utm_content=FullStory&ncid=newsltushpmg00000003

huffingtonpost.com
DraftKings, FanDuel Ordered To Shut Down In Nevada
Posted: 10/15/2015 07:10 PM EDT | Edited: 10/15/2015 09:19 PM EDT

LAS VEGAS (AP) — Nevada regulators ordered daily fantasy sports sites like DraftKings and FanDuel to shut down Thursday, saying the hard-to-miss sites that have flooded the marketplace with TV and Internet ads cannot operate in the state without a gambling license.

The decision comes amid growing backlash by regulators and investigators, including New York's attorney general, after it was revealed employees often played on competing sites, raising questions about possible insider information being used to win.

Nevada regulators govern the country's main gambling hub in Las Vegas, and their actions could hold sway with regulators elsewhere.

Participants on the unregulated sites can compete in games involving professional or college sports, paying an entry fee that goes into a larger pool. They try to assemble teams that earn the most points based on real-life stats in a given period with a certain percentage of top finishers earning a payout.

Entry fees on DraftKings range from 25 cents to more than $5,000. Some prizes top $1 million.

Nevada's decision doesn't affect season-long fantasy sports, long-popular online and in office pools. Daily fantasy sports is similar, but with the contests limited to a day in most cases, not stretched out over a season.

DraftKings and FanDuel say the sites provide games of skill and not chance and are therefore protected by the 2006 Unlawful Internet Gambling Enforcement Act, which carved out a specific exemption allowing fantasy sports.

The distinction has been an important one for the industry, which has dodged the type of regulation that governs traditional casinos and sports books. Avoiding being labeled "gambling" also has made the contests palatable to professional sports leagues that have partnered with the sites or, in some cases, invested directly.

Until now, the sites have been available in all but five states where their legality has been called into question.

"If you're licensed in Nevada, you're good to go," said A.G. Burnett, chief of the state's Gaming Control Board. That includes traditional sports books where gamblers generally wager on the outcome of a given game.

No daily fantasy sports sites are licensed in Nevada, but the sites can apply for licenses.

A notice issued by the Gaming Control Board said the sites must stop offering their contests to Nevada residents immediately, and until they are granted a license. Operators face felony fines and 10 years in prison for running an illegal gambling site. The board said it worked with the state attorney general's office for several months to look into the sites' legality.

Joe Asher, CEO of sports book William Hill's U.S. operations, has repeatedly said daily fantasy sports is gambling and should be treated like all other legal gambling operations. He said the board's decision speaks for itself.

"It shouldn't come as a surprise," Asher said.

Spokesmen for DraftKings and FanDuel did not immediately respond to requests for comment.

Seth Young, chief operating officer of the much smaller site StarFantasy, said he took it a step further than most, commissioning the same lab that tests casino slot machines to determine if the site's games were skill-based. Young said the tests confirmed it, but "it doesn't mean we can disrespect state laws." He noted his company pulled out of 10 states before Thursday, to stay on the right side of the law. His site pulled the plug in Nevada, too.

"We saw regulation on the horizon," he said. He said the company plans to get licensed in Nevada and hopes to license its own technology to other companies wanting to do business there.

The American Gaming Association, which is doing its own study of the legality of daily fantasy sports, said it appreciated the Nevada board's review. It provides clarity, "as well as a roadmap for daily fantasy companies and casinos to provide popular fantasy sports within Nevada borders," the association said.

Daniel Wallach, a sports law expert from Florida, said the board's decision is not going to "cause an extinction of fantasy sports from Nevada, forevermore." But it confirmed what Wallach and other observers familiar with the gambling industry have long contended.

"Fantasy is a form of gambling that should be licensed just like sports betting, just like any other form of gambling," he said.

Also on HuffPost:

Had heard about the $1M prizes from all the crap they are bombarding sports radio with, but not about $5,000 fees.

Anyone know how much $$ DK and FD are pulling in?

Wonder what investigators will eventually find when they comb through everything.