What a difference a week makes. What started as an innocent post on the RotoGrinders forum has spun very quickly into a story in the national media with accusations flying around from anyone who has touched DFS and many who have not. Even within the industry there are split opinions.
DailyFantasyTalk writer/editor Brent Holloway reached out to me for comment, and knowing the DFT crowd well as a member there, I thought this was an appropriate place to share my opinion.
Why did I post on RotoGrinders?
My forum post started innocently. A DraftKings employee tweeted out information containing ownership data around 2 p.m. intending to only include player ownership in 1 p.m. games but also mistakenly including players in 4 p.m. games.
To me this raised some immediate concerns:
- That data can be used to make decisions for contests that were live and give away information DFS players shouldn’t have.
- How could the employee access this data if the 4 p.m. games hadn’t started? This was a big concern to me. The fact that this information was available at least raised the possibility that it was available before 1 p.m. and made me wonder what other data was available.
To be clear, the employee tweeting it out was doing his job. He wasn’t trying to DM anyone or do something shady, just do his job. I posted on Rotogrinders, and he acknowledged his mistake. Unfortunately at that point neither RotoGrinders or DraftKings publicly acknowledged that there could be other data issues, though we don’t know if private conversations were initiated.
The story gets momentum
Less than 24 hours later, the DraftKings employee in question happened to win $350,000. I honestly say “happened to win” because I believe it was a coincidence that the win occurred on the same day as the Twitter incident.
Still, nobody raised any concerns until an article on DFSReport went viral in the industry, raising questions—or some would say accusations—that the DraftKings employee had used this data to profit.
To be honest, I find it highly unlikely that this data was used to profit and win that isolated tournament. However, data like this could certainly be used by employees of both DraftKings and FanDuel to compete on other websites.
It seems obvious in hindsight that employees of both companies may have access to player and contest data in a lot of different formats. When the industry was small, that seemed not to matter. But as the industry grew, did safeguards come into place?
In an old thread on RotoGrinders, a FanDuel employee even admitted that several people had access to such information and in a Boston Globe article, company executives acknowledged they were aware their employees competed on other websites.
So what data was I concerned about?
- Profit/loss data of players. If I lose money on DraftKings it is reasonable to expect I lose money on FanDuel. Employees who know which players are “bad” and which players are “good” could easily use that data to profit on other sites.
- Ownership data. The probability of an athlete’s success compared to his ownership in GPP tournaments is a critical factor to consider for DFS players. If a player from one site knows that a highly projected player is low-owned, he can make some assumptions about that athlete’s ownership on other sites.
- Lineups of top players. If MaxDalury wins millions of dollars per year playing DFS and I can access his rosters on FanDuel, I could make some assumptions on players that may be strong plays on DraftKings.
- Data on what wins tournaments. Similarly, employees have a treasure trove of data on what wins different tournaments. If employees have information on the best methods of lineup construction on one site, they can apply it to others with slight adjustments.
- Data sharing. Employees with access to that data who don’t use it themselves could share with friends and family.
These were my first major concerns. Given what was previously acknowledged by FanDuel on RotoGrinders two years ago, it definitely seemed possible—and in my opinion probable—that many employees could access data like this.
Asking customers to simply trust that the data is being used in an ethical manner isn’t a fair solution.
Mass media
It is pretty crazy how fast this story moved. Early on the industry sites could have done a better job addressing the concerns that were surfaced. Unfortunately, they didn’t say much until the DFSReport article was published.
Unfortunately, it seems the mainstream media are running with an “insider trading” angle on this isolated performance, which I think clouds the real issues around data.
I feel bad for the DraftKings employee who may have done nothing wrong and is now having his name dragged through the mud, but there are several data elements that site employees could have which would give them a massive edge and none of it has been addressed.
It is amazing that people want the DraftKings employee’s head on a stake when a product manager at FanDuel is also one of the top-ranked players in the world. The risk cuts both ways. The employees of both sites likely did nothing that they felt was incorrect based on their jobs and what they had been told by their bosses and company executives.
So, let’s move forward. Just acknowledge the mistakes and tell us how they will be addressed. Covering up, staying silent, or deleting tweets isn’t going to help, although some won’t be pleased with any answer they get.
Moving forward
There is too much money at stake to just trust that everyone will use information honestly, even though most will do nothing wrong and most probably have done nothing wrong.
I believe that employees who play on competitors’ websites do not access data unethically, but I am concerned that they have access to proprietary information that gives them an unfair edge and do not think they should be allowed to play if they have that level of access.
This is a billion dollar industry in which some players are winning millions of dollars. For many, this isn’t a game for $20 or even $200 anymore.
I have played more than $100,000 of entry fees on DraftKings alone and made into the five figures in profit. I am not a DFS life loser, bitter and looking to stir up a controversy. I absolutely love DFS and want the companies to continue to grow, but it is important to surface issues that impact players. Even a small-percent impact on my bottom line is material. We’re talking about billion dollar valuations and it is important to maintain integrity.
I don’t think that transparency and/or regulation would be a bad thing.
The sites have certainly done things to safeguard players that they don’t get credit for, but too many times we have seen an issue bubble up that won’t get addressed unless it hits a critical mass. Unfortunately there isn’t a player’s advocacy group, and while RotoGrinders will step up at times, they don’t take the lead pushing forward issues because it is not their core business.
The issue of employees access to data and playing on competitors sites has been discussed for years and the sites didn’t feel it was important enough until a news cycle got a hold of it. To me, this is short-sighted.
At the end of the day, I do think the sites can and will improve. I would like to see industry employees with data access banned from playing in the industry, and I would like to see contest and lineup data encrypted prior to contest start as a way to fix this.
Even with all the bad press, as long as I feel that my money is safe (which I have zero reason to doubt) and that I can compete in a way that provides me profit or entertainment value, I will continue to do so.
It looks bad now, but I don’t think these are unsurmountable issues. I am certainly willing to help. I love DFS, and I wish the story was focused on how we can continue to make it better.