DraftKing Wins.. Big!

DraftKings Wins Big

It was a scandalous allegation that could have brought a hugely profitable online entity to its knees. An employee of DraftKings was accused of using “insider information” to win $350,000 on rival site FanDuel.

If those allegations stuck, both sites stood to lose huge numbers of customers. Why play, if the game is rigged, right? It’s one thing to think it might be … but when you know the guys In The Know hold all the cards, you would be a fool to ante up. Word would spread fast, and both sites would suffer huge losses. In fact, just the mere whiff of a scandal was enough to put both companies on crisis PR messaging.

So, in a move that exuded all kinds of irony, DraftKings conducted an investigation into whether or not one of its employees used inside information to win big on its direct competitor’s site.

Conclusion? Nope.

According to the report, the investigation was conducted by Greenberg Traurig and led by John Pappalardo, previously a federal prosecutor in Massachusetts. How could the attorneys be so sure the employee didn’t cheat? Because he received the information in question nearly an hour AFTER the teams were locked for that league.

So, unless the guy had both the information AND a time machine, he’s in the clear. At least at this point.

Why is this a big PR win for both of these fantasy sports websites? First, because the media keeps leading with that HUGE number. When fantasy league fans repeatedly hear “$350,000” they don’t hear “cheater” … they hear opportunity. If you want to win $20, play your office pool.

If you want to win a house, play DraftKings of FanDuel.

Next, the situation gave both sites an opportunity to very publicly err on the side of caution.

Even though the employee apparently didn’t cheat, both companies have decided not to allow their employees to play on the opposing sites. Message sent to the customer: look, we understand your concern, and we are willing to take permanent measures to reassure you.

As a result of both the swift action taken by the sites and the information released after the investigation, both sites have seen a huge bump in popularity and player interest. That’s what happens when you manage a PR crisis right. You turn it into a win.