Insider Trading of the Fantasy Variety

In the same way that the stock market is, it is questioned whether or not you need skill or utter luck in order to be successful in fantasy sport leagues. As an unsuccessful member of the fantasy league community I can confidently say that this is down to luck, however there are many out there that disagree.

So that begs the question, would insider information for a fantasy league be beneficial for an individual or would it simply be random useless information? In the case of DraftKings and rival company FanDuel, it is evidently very beneficial as one of DraftKings employees played on the site of FanDuel and won $350,000 in one week (www.ft.com, 2015).

DraftKings have argued that the information that this employee had access to was not available in time for them to make an alterations to their roster. Major League baseball have expressed their shock that DraftKings allow their employees to participate in fantasy contests altogether, most likely because all employees will have more market knowledge than any normal member of the public and will surely lead to an unfair benefit.

Another article in The Financial Times has explored the ongoing investigation into whether or not daily and weekly contests in fantasy leagues are a form of online gambling or simply a game of skill. This is very interesting because if this is classed as online gambling then the overriding factor in winning would be luck. So any insider information would not benefit the individual participating in the fantasy game. However if it is seen as a game based on skill and knowledge, then to use any insider information is seen as not only immoral, but also illegal (Arnold, 2013).

Unless the employee had won this obscene amount of money from just pure luck it is quite apparent that the only other likelihood is that whatever knowledge they possessed has been used to their advantage. If this is the case then it seems farcical that there are no regulations or guidelines that have been put in place to prevent employees that work for daily or weekly fantasy leagues from participating, as they have a clear advantage over the general public.

After deliberating on this issue for some time I have come to a conclusion that the employee is not the main culprit for this situation, as they have simply made the most out of an opportunity that was available to them (even if it is frowned upon by many) and have taken advantage over a market that clearly does not run efficiently. The fault here lays with the authorities and the organisations for not having the necessary principles and regulations in order to make this market a fair one for all to compete in.

Please comment if you disagree or agree with any of my points, or even if you have anything additional that I have not discussed.

Over and Out