In 2006, the Unlawful Internet Gambling Enforcement Act was passed to regulate online gambling, but the legislation excluded fantasy sports because they were deemed skill games.Nevada regulators have ordered daily fantasy sports sites like FanDuel and DraftKings to shut down, saying the businesses can't operate in the state without a gambling license. They have witnesses and can develop a deep, fact-based complaint. “The federal authorities have greater resources, the federal penalites are stronger. The federal authorities need only find one instance of a violation of a state gambling statute, before they dive into the federal statutes,” said Dunbar.

“The question is whether these companies are operating legally or illegally. FBI agents from the Boston field office are also talking with DraftKings customers to inquire about their experiences with the company, according to the Wall Street Journal report.ĭunbar said that once the feds get involved, potential wrongdoers have that much more to fear due to the resources available to prosecutors to build a case. The DOJ and FBI probe, which was first reported by the Wall Street Journal, is looking into the business model of these companies. The federal government has the ability to take away an entire brand.”Īt issue is whether DraftKings and FanDuel - which charge customers an entry fee to draft fantasy sports teams to compete against other customers’ fantasy squads for a chance at big prize money - have violated federal laws in any way. “If it was just a state law violation, (the Ironman defendants) would have been looking at maybe 30 days in jail and a fine,” said Marc Dunbar, a partner in the Government Relations Practice Group for the Florida firm, Jones Walker. Attorney’s Office for the Middle District of Florida announced that Ironman had agreed to forfeit over $2.7 million in lottery proceeds to the government after the company illegally charged athletes to enter into a lottery for a chance to compete in the Ironman competition in Hawaii. As for the DOJ and FBI probe, a prominent Florida attorney who has represented many gaming clients said one need look no further than the case against the World Triathlon Corporation (Ironman) to understand the potential impact of a federal inquiry.

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