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NFL teams may cut ties to fantasy sites amid inquiries

An employee worked at DraftKings in Boston.Stephan Savoia/Associated Press/file

The US attorney’s office in Boston has subpoenaed DraftKings Inc., seeking information about whether one of its employees had inside information that helped him win a fantasy sports contest on a competitor’s site, according to two people familiar with the federal investigation.

The inquiry is examining whether fantasy sports operators violate federal law — and, more specifically, whether Ethan Haskell, the DraftKings employee who won $350,000 in a FanDuel Inc. contest, took advantage of nonpublic information, according to the people.

The US attorney’s office in the Southern District of New York has subpoenaed the company seeking similar information, those people said. It’s unclear whether the two offices will conduct simultaneous investigations, or if one will eventually take the lead.


Haskell’s attorney, Mark E. Robinson of the law firm Mintz Levin, declined to comment.

DraftKings did not immediately respond to a request for comment. On Monday, the company said an investigation it commissioned by John Pappalardo, a former US attorney for Massachusetts, found that Haskell did not have inside information when he submitted his winning NFL fantasy lineup to FanDuel.

The offices of Preet Bharara, the US attorney in the Southern District of New York, and Carmen Ortiz, the US attorney in Boston, declined to comment.

The new development in the Boston investigation comes as DraftKings and FanDuel have been forced to cancel VIP events in Las Vegas, after Nevada gambling regulators ruled last week that the companies’ contests are a form of gambling that require a state license to operate.

The firms are also facing the prospect of losing NFL sponsorships if states evaluating the legality of fantasy sports cash games determine they violate gambling laws.

Marketing deals with NFL clubs have been an integral part of both companies’ attempts at mainstream appeal this football season. On touchdown runs and in postgame interviews, company logos are often visible in the background, plastered on stadium walls.


At Gillette Stadium in Foxborough, for instance, and in the home arenas of the Dallas Cowboys and Kansas City Chiefs, fans eat and drink — and track fantasy statistics on big-screen TVs — in DraftKings-branded sports bars.

DraftKings and FanDuel have marketed their products aggressively in EverBank Field in Jacksonville. STEPHEN B. MORTON/ASSOCIATED PRESS

One place where such partnerships could be in jeopardy is Florida, where the Miami Dolphins now say they may have to end a business relationship with Boston-based DraftKings.

“We would need to consider all of our options, including termination, if their business model is deemed to be unlawful,” the Dolphins said in a statement.

Meanwhile the Wynn Las Vegas resort and casino has told DraftKings to find a new location for the semifinal round of its “Fantasy Football World Championship,” which had been planned for Dec. 17-21. With a $15 million purse and a $5 million top prize, the event was billed by DraftKings as “the biggest fantasy contest of all time” and had been in the works for four months, according to Wynn.

A spokesman for Wynn said the casino company told DraftKings on Oct. 15 that it could not host the event.

That was the same day the Nevada Gaming Control Board ruled that such contests constitute gambling under that state’s laws and therefore require licenses.

DraftKings and FanDuel, which have rejected the gambling label, said they would not seek licenses and have stopped accepting entries from Nevada in all of their contests.

DraftKings “received communication from us as soon as the commission made its decision,” Wynn spokesman Michael Weaver said Thursday. “We can’t work with them in Nevada.”


A DraftKings spokeswoman said its contest will be moved to San Diego but would not name the venue.

The final round for 10 top players is slated for January in Los Angeles.

New York-based FanDuel said on its website that it, too, is looking for a new venue for its own fantasy football championship, which had been scheduled to take place Dec. 13 at the Cosmopolitan of Las Vegas casino resort.

That contest has a $13 million prize pool and will award $3 million to the winner. The Cosmopolitan declined to comment, and FanDuel did not respond to a Globe inquiry.

After surging in popularity amid an aggressive advertising push, both fantasy companies became mired in controversy over the past month. Their largely unregulated industry is under investigation by federal authorities in three states, and public officials and some players have raised questions about the fairness of the games after the Haskell incident.

In Massachusetts, Attorney General Maura Healey and the Massachusetts Gaming Commission are reviewing fantasy sports, and House Speaker Robert A. DeLeo said this week that the Legislature would likely take up a bill spelling out regulation of cash contests.

Asked Thursday whether daily fantasy sports companies should be regulated, Governor Charlie Baker said his focus was on consumer protection.

“I want to make sure that if you’re playing one of these games, you are playing the game based on the best available data and that you are on what I would call . . . a level playing field,” Baker said. “Information is really power when it comes to this particular endeavor.”


In daily fantasy sports, users assemble imaginary rosters of real-world athletes, and are awarded points based on how those athletes perform in games.

Expert players use sophisticated computer programs to pick athletes, and some have expressed concern that employees of fantasy sports companies could unfairly use nonpublic data to make more accurate predictions.

Both FanDuel and DraftKings recently banned their workers from playing in each other’s contests.

Twenty-nine of the NFL’s 32 clubs have advertising contracts with fantasy sports operators. DraftKings has deals with 12, FanDuel has 16, and Yahoo! Inc. has one.

The three teams that do not have fantasy deals — the Seattle Seahawks, New Orleans Saints, and Arizona Cardinals — are based in states where the contests are illegal. All three teams said state laws are the reason why they have not signed on with fantasy sports firms.

NFL spokesman Brian McCarthy stopped short of saying the league would order clubs to void their deals in the event of a legal status change. But he made the league’s expectation clear: “Teams have to follow local, state laws,” he said.

The Jacksonville Jaguars have created a fantasy football lounge at EverBank Field in Jacksonville, Fla., that is outfitted with recliners and Wi-Fi. SARAH BETH GLICKSTEEN/NEW YORK TIMES

Callum Borchers can be reached at Follow him on Twitter @callumborchers. Dan Adams can be reached at Follow him on Twitter @DanielAdams86.