Fantasy sports employees bet at rival sites using inside info

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Stephan Savoia / AP

Len Don Diego, marketing manager for content at DraftKings, a daily fantasy sports company, works Wednesday, Sept. 9, 2015, at his station at the company’s offices in Boston.

Mon, Oct 5, 2015 (4:35 p.m.)

A major scandal is erupting in the multibillion-dollar industry of fantasy sports, the online and unregulated business in which players assemble their fantasy teams with real athletes. On Monday, the two major fantasy companies were forced to release statements defending their businesses’ integrity after what amounted to allegations of insider trading, that employees were placing bets on information not available to the public.

Last week, a DraftKings employee admitted to inadvertently releasing data before the start of the third week of N.F.L. games, a move akin to insider trading in the stock market. The employee — a midlevel content manager — won $350,000 at rival site FanDuel that same week.

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