DraftKings Inc. has received a subpoena from U.S. Attorney Preet Bharara’s office asking for information about an employee’s activities and potential misuse of inside data, according to people briefed on the matter.
Mr. Bharara’s office in the Southern District of New York is also investigating whether the business model behind daily fantasy-sports firms like Draft Kings and FanDuel Inc. violates federal law, The Wall Street Journal reported Tuesday, citing people familiar with the matter.
The subpoena, which seeks information on DraftKings employee Ethan Haskell, comes despite an assertion by an investigator hired by the company that Mr. Haskell couldn’t have used inside information to win a big fantasy game on a competing site.
On Monday, the company said the independent probe led by former U.S. Attorney John Pappalardo found that Mr. Haskell couldn’t have used the released data about contestants’ lineups to win a contest held by a competing company. Mr. Haskell won $350,000 playing in a top contest on FanDuel that same week.
Mr. Haskell didn’t receive the internal DraftKings information until 40 minutes after he had locked up his lineup on FanDuel, the investigation found.
The fast-growing fantasy sports industry has been under fire from state and federal lawmakers, gaming regulators and fantasy players in the weeks since news of Mr. Haskell’s premature posting of information and subsequent win became public two weeks ago.
DraftKings and FanDuel have both said that fantasy sports is a legal game of skill that doesn’t amount to gambling.
Hundreds of millions of dollars in venture capital and player money are flowing into the booming fantasy-sports industry, which counts sports leagues, Google Inc.’s investing arm, and major media companies among its investors.
While the major sports leagues have yet to distance themselves from daily fantasy sports companies, they are continuing to closely monitor developments related to the investigations.