Spurred by a swirling cocktail of controversy and legal turmoil, the Fantasy Sports Trade Association announced Tuesday that it is creating the Fantasy Sports Control Agency.
The FSCA will be led by Seth D. Harris, who served as Deputy and Acting U.S. Secretary of Labor for the Obama Administration. It will act as an independent authority providing mandatory guidelines for industry standards, controls, auditing procedures and enforcement, according to an email circulated to FSTA members Tuesday.
“The issues and opportunities facing the fantasy sports industry can be best addressed through an independent agency supported by the industry and its members,” Harris said in a press release. “The FSTA will continue to work closely with state and federal lawmakers and regulators as we develop and implement strong integrity programs. We are confident that an independent control agency can prevent any unethical, dishonest, or unfair behavior. In the process, we can save lawmakers and regulators the cost and effort of intervening so that they can expend their limited resources on bigger and more societally important challenges.”
Daily fantasy sports have come under intense scrutiny in recent weeks at both the state and federal level. It is unclear at this point how the FSCA might coincide with proposed state legislation calling for varying degrees of regulation and oversight.
“Many details will be ironed out in the coming weeks and months,” FSTA president Paul Charchian wrote in the introductory email, “and I will keep you informed each step of the way.”
Charchian said industry stakeholders have been supportive of the initiative, which will include a “major accounting firm” to perform audit duties.
Further details from the press release:
As an independent authority, the FSCA will be empowered by the FSTA to create a system consisting of four principal parts:
- Standards: Develop a system of standards for the fantasy sports industry founded on transparency, integrity and ethical behavior.
- Company Controls, Processes, and Leadership: Every FSTA member company will be expected to respond to the FSCA’s standards by establishing a system of controls and processes to ensure compliance. In addition, every member company will be expected to appoint a senior leader reporting to top executives and overseeing compliance efforts.
- Auditing Policies and Procedures: Implementation of a sound, regular auditing process to measure and report on company compliance.
- Enforcement: Establishment of a system that provides incentives and public recognition for compliance with FSCA guidelines and penalties for failure to comply.