I used to travel for work a lot with this one guy, who I’ll call Chris. He loved to gamble. Loved it. He called it action. He loved to say he was looking for action. When he couldn’t find any, he’d make some on his own. One of his favorite bits of action was to bet $5 on who’s bag would come out first at baggage claim at the airport. I’m not much of a gambler, but I’d usually go along with this one because it was a fun way to kill some time. We traveled a lot back then, and we went to some exotic locations. Chris almost always won, and would spend the entire taxi ride into London, or Paris, or Cape Town, or Las Vegas, talking about how he’d beaten me.

I mentioned this to my brother, and he laughed at me. “You sucker,” he said. “Is he a platinum level  frequent flyer?”

“Well, he does get upgraded a lot more than I do,” I said, the lights slowly starting to come on.

“He gets one of those priority stickers on his bag, dummy,” my brother said. “You’ve been had.”

And if you play fantasy football on one of those big sites, like DraftKings or Fanduel, you’ve been had, too. The New York Times reported this morning that an employee of DraftKings used insider information to win $350,000 in one weekend on another fantasy site, FanDuel. Both sites have said that they’re shocked—SHOCKED!—to learn of such unscrupulous behavior by an employee, and that this is a very rare happening, a mistake really, in the unregulated yet highly honorable world of online fantasy sports, which ought to be called what it really is—online gambling—yet for some reason is protected by an act of Congress.

If it seems that fantasy football has been inhabiting your dreams lately, it’s because it probably has. Forbes.com reported last month that fantasy sports websites are on track to spend $175 million in the third quarter of this year alone to get people to wager on their ability to predict which football players will have good games; DraftKings alone has pledged to spend $250 million this year with ESPN. No wonder your hear Edward Norton when you close your eyes. This from an industry expected to have a $2.6 billion handle this year and to grow to more than $14 billion by 2020.

Fantasy Sports

Those are staggering sums of money. Where do these sites come up with cash like that? Simple: from the suckers who—like the fool who thinks his buddy’s bag appears first as if by chance—do their research and place their bets thinking that this might be their week, when, in fact, it turns out to be the week of the guy the Times described as “a mid-level content manager,” who takes his insider information from his employer and walks across the street to use it to win enough in one weekend to buy a nice house, no mortgage.

At least Wall Street and Las Vegas have some degree of government oversight. The Feds have a whole wing of the government—the Securities and Exchange Commission—devoted to making sure Wall Streeters play by the rules, and casinos have to abide by the rules of the Nevada Gaming Commission. The existence of neither of those entities means you won’t get screwed. Big institutions have the ways and means to always win on Wall Street—after all, how good is your flash trading software—and the houses on The Strip always win in the end. Sure, you might get lucky with your initial investment in Starbucks, Google or Apple, and the roulette ball might bounce your way sometime. But in general, the deck is stacked against the little guy.

And it’s even more stacked against you with the fantasy sites. Because fantasy sports are considered games of skill rather than games of chance, they are not overseen by any regulatory body. In other words, the foxes guard the henhouse. So when FanDuel and DraftKings come out with a joint statement that says “Both companies have strong policies in place to ensure that employees do not misuse any information at their disposal and strictly limit access to company data to only those employees who require it to do their jobs…Employees with access to this data are rigorously monitored by internal fraud control teams, and we have no evidence that anyone has misused it,” we are supposed to believe them.

Fantasy Sports

It might not feel as sleazy if the networks, leagues and its owners weren’t so far in bed with them. Robert Kraft and Jerry Jones both own stakes in DraftKings, and both sites have raised millions from the likes of Fox Sports, NBC and Comcast.

Fantasy sports used to be a lot of fun. You’d get together with your buddies to draft your teams, watch games with a rooting interest on the weekends, maybe trade a few bodies and hope to win a couple hundred bucks at the end of the year, all for an hourly rate of maybe 75 cents an hour when it was all said and done. But you did it for the friendship and the love of the sport.

Now people do it for money. And it’s become the province of just one more rich guy who loves money more than he loves the game.

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