The Federal Bureau of Investigation and U.S. Department of Justice are conducting a probe into whether fantasy sports operators are violating federal law.
Operators such as DraftKings and FanDuel have recently expanded their offerings to include eSports, with the former acquiring AlphaDraft last month.
The investigation, in which the FBI has contacted customers of DraftKings to ask about their experiences using the service, is regarding a 2006 ruling made in Congress.
As part of an ongoing legal definition proceedings, Congress prohibited the transfer of money between financial companies and online gambling sites, however “games of skill” fall under an exemption clause.
The rise of Daily Fantasy Sports sites began shortly after this ruling, as the Justice Department investigates to find out whether the business model really does fall within the 2006 exemption.
Sites came under close scrutiny last week as a DraftKings employee let slip that he had released information about the site’s largest contest to date, while at the same time winning $350,000 on rival site FanDuel.
“It is entirely predictable that the government would follow up on the misleading reports about our industry,” a DraftKings spokeswoman told the Wall Street Journal 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.”
ESports can ill-afford to be associated with underhand dealings of this sort, having only recently thrown off a spectre of corruption by attracting relatively legitimate gambling proprietors.
ESL also recently partnered with SportRadar in order to ensure suspicious betting activity on their organised matches was being monitored across major sites.
That these brand names may themselves be below board is a fly in the ointment that has been slowly healing the professional integrity of the eSports gambling industry.