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DraftKings, FanDuel Ban Employees From Daily Sports Betting After Insider Trading Allegations

New rule comes in wake of the New York Attorney General office’s investigation into the two companies

DraftKings and FanDuel on Wednesday permanently banned their employees from betting on any daily fantasy sports sites for money.

The ban comes in the wake of the New York Attorney General office’s investigation into alleged insider trading at the two companies, and a demand that they turn over details of any probes into their employees.

The companies will also launch internal probes following reports that a DraftKings employee won $350,000 on FanDuel during Week 3 of the NFL season. It was suspected that he had access to data showing which football players were the hottest to own that weekend.

“Effective immediately, DraftKings employees will be permanently prohibited from participation in any public daily fantasy games for money,” DraftKings said in a statement on its website Wednesday. “We will also prohibit employees from any Daily Fantasy Sports contest operator from participating in games on DraftKings. We are glad to see that others in the industry have followed suit and believe that this is an important next step in retaining the trust of our players.”

The Boston-based start-up site has hired a legal team from Greenberg Traurig, led by former United States Attorney John Pappalardo, to review its findings and conduct an investigation into allegations.

Meanwhile, FanDuel has hired former U.S. Attorney General Michael Mukasey to evaluate its internal controls, and is creating an advisory board led by Michael Garcia, who investigated the 2018 and 2022 World Cup bidding-process controversies.

On Tuesday, ESPN removed sponsorship and graphics for the two companies from any ESPN news programming for that day. “It is a standard procedure for us pull these kinds of sponsorships and billboards when we are covering breaking news,” a network spokesperson told TheWrap. “We look to avoid any suggestion of influence on our coverage.”

ESPN, has a major advertising relationship with DraftKings, reported to be worth $250 million.