FanDuel’s Employee DFS Participation Policy Is…Interesting

In past articles, I have noted that the daily fantasy sports (DFS) companies, primarily the two leaders, DraftKings and FanDuel, have a serious problem with optics. That is, even though most people likely have no problem with daily fantasy sports in and of itself and even if everything the sites have been doing has been on the up and up (question mark), they have made little effort to actually give the public the perception that they are good actors. Turn after turn, they have made PR and marketing mistakes that just make the targets on their big grow.

Recently, it happened again, but this time because of an effort by FanDuel to actually aid the perception of its company.

fantasy footballWhen FanDuel and DraftKings sued New York to keep Attorney General Eric Schneiderman from banning them from offering their games in the state, FanDuel submitted its company policy about playing DFS on other sites as evidence. Deadspin acquired a copy of this policy and published it for inquiring minds to peruse, shedding a light on how FanDuel wasn’t interested in its employees doing the *right* thing, but rather trying to make sure the public didn’t think they were doing the *wrong* thing.

You may remember that in late September, DraftKings employee Ethan Haskell published percentage owned information for his site’s Millionaire Maker contest for the NFL’s Week 3 early slate on the DraftKings blog. This was fine, except that he did it early, before all of the weekend’s games had begun. This meant, of course, that he clearly had access to this information at some point before all games had started and when it was discovered that he won $350,000 in FanDuel’s biggest contest, a controversy erupted. Did he use “inside information” to give himself an edge on FanDuel? According to both an internal investigation and one by an independent party, Haskell did not have his hands on the info until 40 minutes after his lineup had locked, but it still didn’t sit well with people. Who had access to competitive information and what could they do with it?

FanDuel’s policies attempt to address things like this, but the problem, as you will see, is they don’t go far enough to trying prevent any such problems, but rather look to just manage the public relations aspect of the company’s employees having the ability to see sensitive lineup data and play on other sites.

Right off the bat, the “Goals” section of the policy gets into the public’s perception of FanDuel and its employees:

Goals: These outline what we’re hoping to accomplish by asking you(and other employees) to agree to this policy.

•    Limit ability of employees to exploit “inside information” such as the picks of top users, or the win rates of potential opponents.
•    Reassure any concerned site users that employees aren’t exploiting inside info.
•    Reduce chance of users questioning ability of employees to exploit inside info against them when they play on other sites.

After that is “Principles”:

Principles: These are some of the factors that played into the specific set of rules that we’re asking you to agree to.

•    Playing on other sites helps employees do their jobs better
•    ‘Do no harm’ through play on other sites, so users are less likely to be suspicious or angry.
•    Minimize internal flow of exploitable information where possible, so that there are fewer opportunities for exploitation.
•    We hire people we trust, so we don’t have any scandals.
•    This document should provide clarity to employees on what is and isn’t acceptable.

I can buy the first bullet point. Certainly, if employees are active participants in DFS, they will have a better understanding of game mechanics and will be able to see things much better from a customer’s perspective. The “Do no harm” part is dubious, though, as it makes FanDuel look more concerned with optics than it does with simply doing the right thing.

The third section, “Risks,” is fine, as it lists a few things that could happen if FanDuel doesn’t implement this policy. Examples include employees copying customers’ picks and employees essentially bumhunting on other sites (going after known weak players).

After that is “Internal Controls & Guidelines,” which, in a nutshell, states that employees shouldn’t access or discuss confidential information such as player lineups unless necessary for performing job functions. Ok, but it also implies that just about any employee could look up such info if they wanted to. Rather than leaving it open to interpretation, FanDuel should have been very specific in detailing who has authority to access what information and when. Don’t give employees a chance to do something wrong.

The last section is the most fun. Take a gander:

Rules for Employee Play on Other Sites:

•    Never be among the top five players by volume on any one site (based on site leaderboards). Never be among the top ten overall on the RotoGrinders leaderboard. Top players frequently become targets for accusations by other users.
•    Never account for more than 2% of entries in any tournament of more than 1,000 entries. Never account for more than 5% of entries in any tournament of more than 100 entries. Players who swamp big tournaments with entries frequently become targets of accusations.
•    Don’t be the 2nd person into a head to head contest against the same opponent in more than one contest per day. This rule will greatly limit the ability to exploit information about user performance, and will also limit the likelihood of complaints from users.
•    Never use information gained from viewing users’ lineups.
•    Seek to avoid playing anyone whose lineups you saw for that time period.
•    You must provide FanDuel with a list of your usernames on all sites where you play for real money. We may or may not choose to reveal your employment status and identity to those sites or on other industry sites.

Again, I don’t necessarily have a problem with people from one DFS company playing on the site of another. What FanDuel is doing here, though, is controlling the perception rather than the source of the problem. The company knew it was going to run into trouble with its employees playing on other sites, so it already started scheming to manage its way through sticky situations.

How about, instead of giving staffers tips on how to fly just barely under the radar, give them strict instructions as to how to participate in DFS contests ethically, in a way that there will never be any problems. Institute rules like only one entry at a time in large guaranteed tournaments (or maybe at most a handful – that 2 percent/5 percent rule is just dumb). Or how about instead of, “Never use information gained from viewing users’ lineups,” say, “Never look at users’ lineups.”

FanDuel should not have given its employees so much leeway. I can understand wanting to let them play DFS – hell, I would want to play if I worked for FanDuel – but it needed to put into place MUCH stricter rules, rather than policies that acknowledge that there will inevitably be problems and offer ways to mitigate the public relations hit.


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