Earlier this week, the New York Attorney General's office announced that it is opening an inquiry into DraftKings and FanDuel's daily fantasy sports sites.
That followed the news of a DraftKings content manager using inside information to win $350,000 on FanDuel.
Now, Adam Johnson, a daily fantasy player from Kentucky, has filed a class-action lawsuit against DraftKings and FanDuel, alleging that the companies committed fraud because they didn't reveal that their employees had access to private data that could help them outright cheat regular fantasy players, like himself, out of millions.
This could be the tipping point of both daily fantasy sites being tied up in legal entanglement for quite some time to come. Furthermore, it could lay the groundwork for fantasy sports becoming regulated. Don't forget, just last month, a congressional committee was going to review the legal status of fantasy sports and sports betting, overall.
According to USA Today, Johnson's lawsuit also claims that DraftKings employees have won at least $6 million playing on FanDuel, its competitor site.
"Plaintiff and the proposed classes would not have deposited money or engaged in any activity on defendants' websites if they had known that they were competing against individuals with insider knowledge, access and use of nonpublic data," part of the lawsuit obtained by USA Today read.
Each fantasy site has also announced that it has hired outside law firms to review their internal practices against fraud. Earlier this week, each site also forbid its respective employees from playing fantasy games for money.
