FBI launches probe into fantasy sports sites

The FBI and Justice Department are conducting a probe into fantasy sports sites, according to a report Wednesday in The Wall Street Journal.

FBI agents from its Boston office have contacted customers of DraftKings to discuss their experiences with the fantasy sports site.

{mosads}The probe comes after a recent reports disclosed that an employee of DraftKings accidentally released important internal data on customer picks and also made $350,000 in a contest on a rival site the same week.

Those reports sparked concerns about insider trading-like behavior and led New York’s attorney general to launch a probe into DraftKings and competitor FanDuel. Both companies have denied any wrongdoing.

Now the feds are looking into the matter, though the Journal reports that the inquiry is only in its early stages.

“It is entirely predictable that the government would follow up on the misleading reports about our industry,” a DraftKings spokesman told the Journal. “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.”

Online sports fantasy sites have faced growing scrutiny, and one lawmaker, Rep. Frank Pallone Jr. (D-N.J.), has called for hearings on the industry.

Critics say the sites are a form of gambling and should be regulated as such. But supporters say fantasy sports are games of skill and thus should be allowed to continue operations under an exemption from the law that bars many forms of online betting.