Calls sound to regulate fantasy sports betting industry

CHICAGO (WPVI) -- There is a call to regulate an industry after an employee of one fantasy sports site won a lot of money at a rival site. Fantasy sports began a few shorts years ago with groups of fans playing against one another for fun. Now, it is big money making business.

Now that it is football season, most have probably seen the ads for online fantasy sports sites. Players put together a fantasy team with real athletes, and make money depending on how their players do on game day.

"I'm not trying to hit the lottery by doing this, but it is fun," says Ross Sider.

Sider has been playing since his college days, before fantasy football exploded on the internet. What was once a cottage industry has turned into a multibillion dollar business. Two websites, DraftKings and FanDuel, are the main players; both took in $60 million in the first week of the NFL season.

Now the two companies are defending themselves after a scandal erupted when a DraftKings employee won big money on the FanDuel site.

"An employee at one of the two major companies arguably had access to certain information," says former federal prosecutor Jeff Cramer, "And then went on the competitor's site and made about $300,000."

Cramer now works for Kroll Securities, a company with gaming clients. Cramer says the fantasy sports scandal is akin to insider trading, but online fantasy sports is legal and unregulated. Some in Washington say it is time for that to change.

"How is it any different from sports betting," asked New Jersey Rep. Frank Pallone. "I don't see it, what because you call it fantasy?"

As a player, Sider supports some type of regulation. If it happens, Cramer says not to expect broad Security and Exchange Commission-type of regulations. It's more likely to be something more narrow.

"As players, population want to know when they go to these sites that no one on the inside has a competitive advantage that they don't have," says Cramer.

Rep. Pallone has already requested congressional hearings to explore the relationship between fantasy sports and gambling. In the meantime, DraftKings and FanDuel issued a joint statement saying they have strong policies in place to make sure employees to not misuse information.