Tuesday, October 06, 2015

The DFS “Scandal” and Online Poker’s Past

Late last week I was following a few tweets and read a post on what appeared to be a yet-to-explode forum thread regarding this story about a DraftKings employee accidentally releasing ownership data for the Week 3 NFL games during the afternoon that Sunday, including ownership for games that hadn’t started yet.

The post appeared on the RotoGrinders site in a forum thread titled “DraftKings Ownership Leak.” Like I say, the thread didn’t seem to have gotten much attention, although if I remember correctly subsequent posts (which I don’t see today) made it seem like the thread might have been locked early.

The first response (that remains) was from someone at RotoGrinders saying he was talking to a person named Ethan at DK who was about to post a statement. The RotoGrinders guy defends Ethan and DraftKings. Then Ethan’s statement appears, and he explains how “I was the only person with this data and as a DK employee am not allowed to play on the site.” An innocuous-seeming, nothing-to-see-here-please-disperse kind of exchange.

This back-and-forth sat there quietly for a couple of days, but over weekend Twitter picked up the story in a big way, and by yesterday it had developed considerably with more details about the data leak as well as information about the employee Ethan Haskell’s successes on the rival FanDuel site, including a massive $350,000 win for finishing second in FD’s $5M NFL Sunday Million during Week 3. More on Haskell himself has been made more generally known as well, including his position at DK (Written Content Manager) and his previous experience as a content editor for a couple of years at RotoGrinders (perhaps explaining the RG guy’s defense of him in the thread).

It should be noted that there is no evidence that Haskell used any of the info he accidentally leaked to help him land the big prize in the FD contest (or in other games). In any event, the story has now ballooned into a larger discussion about daily fantasy sports, in particular about potential problems with game integrity.

Legal Sports Report has been a good site to follow for coverage of the many issues arising with this story as well as other DFS-related topics. This article from the weekend titled “DraftKings Lineup Leak Rocks Daily Fantasy Industry: Questions and Answers” provides details of the original story, a full explanation of why “insider” knowledge of DFS player ownership data ahead of time can provide a huge edge, and other issues having to do with the sites’ policies and current lack of regulation. The article also includes new statements from both DraftKings and FanDuel from Monday about their intentions to review their “internal controls” and policies.

The story has now moved into the mainstream as well, with even The New York Times reporting on it yesterday in “Scandal Erupts in Unregulated World of Fantasy Sports.” Thanks in large part to the highly conspicuous blitz of television advertising by both DFS and FD, the topic of daily fantasy sports is no longer interesting just to those who play but to others, too, who have been inundated so aggressively with all the ads.

Those of us who were involved with online poker when it first appeared and began to grow in popularity can’t help but notice several parallels seeming to emerge with regard to this story.

Like with DFS, online poker was around for a few years before suddenly catching fire. Planet Poker was the first online site to deal real money games, doing so on January 1, 1998. A little over five years later came the first episodes of the World Poker Tour, then Chris Moneymaker’s win at the 2003 World Series of Poker Main Event, and then the “boom,” generally speaking.

Last week I noted the anniversary of the Unlawful Internet Gambling Enforcement Act of 2006, a piece of legislation that interestingly has had the dual significance of helping jettison online poker from the U.S. while introducing a means for what has now evolved into the DFS industry to be introduced. The first DFS site (Fantasy Sports Live) went live in June 2007, with that industry’s “boom” (as it were) also not occurring until several years later.

As online poker grew more popular, the potential for scandals began to grow as well with much discussion about possible industry-threatening problems on the horizon. Lots of stories about collusion, ghosting, multi-accounting, and other violations of sites’ terms and conditions were circulating, as were instances of player funds being lost with the boom-preceding PokerSpot controversy the biggest early example to occur.

Then on September 12, 2007 a player going by the username POTRIPPER won the $100K Guarantee on Absolute Poker after correctly calling an opponent’s final hand all-in with just ten-high. My first reaction -- chronicled in a post here a week-and-a-half later -- was to wonder about AP getting hacked somehow or perhaps there having been an “inside job.” As we would come to learn, the latter was indeed the case, something AP would initially try to cover up (thereby making the scandal worse). The story then quickly took off in a big way both within the poker world and in the mainstream (including an article in The New York Times).

The loser of that crazy ten-high hand versus POTRIPPER was poker pro Marco Johnson who emailed AP afterwards to request hand histories from the tournament. Johnson didn’t initially study the response, but after buzz about the hand and other possible shenanigans at AP had begun to build he went back to look at those hand histories again and discovered something remarkable. Not only were his hole cards listed, but so, too, were the hole cards of all the other players. The hand histories then became a “break in the case” helping prove POTRIPPER was able to see others’ hole cards and a first step in unraveling the “superuser” scandal.

The larger superuser scandal that would follow at AP sister site UltimateBet (a story that first broke in early 2008) would similarly start out focusing on a single player -- “NioNio” -- who won at an insanely high rate on UB right up until the week the AP scandal broke at which time the player suddenly disappeared from UB. (That scatter plot graph above created by Michael Josem famously illustrated NioNio’s dominance.) Other suspicious accounts were then identified, and the story and scandal got bigger and bigger from there, never being truly resolved (despite former UB part-owner and representative Phil Hellmuth’s revisionist claims to the contrary).

At least a few parallels can be seen here -- an accidental “leak” of information by a site suddenly opening the door to closer scrutiny and suggestions of wrongdoing, a focus on “insider” information allegedly helping an employee to win (in the DFS case by going onto a different site to play), and remarkably high win rates inspiring accusations of an imbalance in the playing field.

The unambiguous advantage of seeing others’ hole cards and the less obvious advantage of having access to ownership data before games close in DFS perhaps don’t seem analgous (to most of us). But those who understand DFS strategy and how the games work have persuasively put forward the parallel. Again, this issue isn’t unrelated to other ones affecting the game, including the huge knowledge gap between number-crunching DFS regs and everyone else, something that is also akin to what we’ve often talked about in online poker where third-party software and other aids have created a significant advantage for a segment of full-timers over those who don’t benefit from the information provided by such tools.

Online poker survived (and mostly continued to thrive) despite the AP and UB scandals, with the sites themselves even able to remain in operation until both collapsed post-Black Friday (resulting in another huge loss of players’ funds). There continued to be serious problems with game integrity thereafter, of course, and the Black Friday indictment and civil complaint would dramatically demonstrate even larger issues for the industry.

I’m actually not quite ready to join the torch-carrying crowd currently storming the gates of DFS. I will say, though, as someone already not hugely inspired to get involved with DFS, recent developments are hardly encouraging me to give it an earnest try.

That said, knowing how similar things unfolded and turned out with online poker, it will be curious to see where the faster-moving DFS “scandal” goes next.

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Blogger Memphis MOJO said...

The story has now moved into the mainstream as well

I heard a piece about this on NPR just today.

10/07/2015 1:12 AM  

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