Dream teams

Twenty-year-old entrepreneur Joey Levy and two fellow students started a fantasy sports site this year in their apartment. The current Draftpot platform is less than 2 months old, but boasts more than 7,000 users. “We are very new, but we’ve already paid out over $2 million,” Levy told me.

Levy took advantage of a daily fantasy sports industry poised to triple this year. But the unregulated industry also faces a major speed bump, as the New York attorney general investigates what some liken to insider trading.

The investigation is aimed at two $1 billion monoliths, DraftKings and FanDuel, which have inundated airwaves with ads. Traditional fantasy football is decades old, but nearly 4 million people this year are expected to play this new form of one-day risk for pots of money, garnering unavoidable gambling comparisons.

Players customize virtual teams and get points based on those athletes’ performances in real life. Casual players picking cookie-cutter squads of stars can’t outscore the field. Almost invariably, those who win money spend hours poring over spreadsheets to predict obscure players poised for great games. In fantasy baseball, 91 percent of profits had gone to just 1.3 percent of players at one point this season, according to SportsBusiness Daily.

Suspicion zeroed in on a DraftKings employee who won $350,000 on FanDuel. How better to build a unique team than use data from thousands of entries? A would-be class-action lawsuit alleges fraud and conspiracy, while calls for congressional hearings and a New York investigation are ramping up.

DraftKings says the employee didn’t access inside data before playing. But Draftpot and others quickly banned employees from playing on any site. “We now need to operate like, you know, companies that are part of a billion-dollar industry,” said Levy, who says he built Draftpot on a model that gives casual players a chance.

For casual players, it’s essentially gambling. The NCAA considers it so, promising student athletes a one-year ban if caught playing. But for fantasy pros, it’s undoubtedly skill. That’s where the NFL stands—and leagues, owners, and broadcast networks all invest in firms and embrace advertising because gamers watch games.

A 2006 online gambling law made an exception for skill-based fantasy before the one-day risk model emerged. Levy feels little threat from looming government involvement. “On the contrary,” he said, “regulation would simply validate the industry.”

Personal crises

Before the New York Yankees lost the AL wild-card game, CC Sabathia, 35, surprised teammates in confessing an alcohol problem and entering rehab. “I want my kids … to know that I am not too big of a man to ask for help,” said Sabathia. Alcohol may have caused far more damage at the University of Southern California. Steve Sarkisian entered rehab after being fired as head football coach Oct. 13, a day after arriving at practice “not healthy”—allegedly drunk. Sarkisian, 41, blamed intoxication at an August pep rally on a reaction with meds, but his firing connected dots that his reputation for enjoying drinks had turned destructive. The father of three is in the midst of a divorce. —A.B.