New York Attorney General Eric Schneiderman on Tuesday launched an inquiry into the evolving scandal involving fantasy football websites DraftKings and FanDuel by sending letters requesting information from each site. The scandal involves allegations that employees at both sites profited by playing fantasy football with the aid of sensitive information not available to the public. Photo by New York Attorney General's Office

NEW YORK, Oct. 6 (UPI) -- A scandal involving allegations of insider trading among employees at two fantasy football leagues drew the attention of New York Attorney General Eric Schneiderman on Tuesday.

Websites DraftKings and FanDuel were accused of a form of insider trading after at least one employee hit a major jackpot on one of the sites. The employee allegedly had access to sensitive information not available to other players.


The New York attorney general's office on Tuesday launched an inquiry into the matter, and sent identical letters to both daily fantasy football leagues to ask for their internal fraud prevention data.

"These allegations, and your company's subsequent statement, raise legal questions relating to the fairness, transparency, and security ... and the reliability of the representations your company has made to customers," Schneiderman wrote in the letters.

The companies acknowledged they permitted employees to play the games with the privileged information on each other's sites. Since word of the scandal erupted, though, both leagues have suspended that practice.

Meanwhile, the websites have started to see sponsors backing away from association. ESPN on Tuesday said it would continue to run televised ads for DraftKings and FanDuel, but would no longer use the sites as sponsors for program segments.

"ESPN today continued running commercials for the two main daily sports fantasy companies, but has removed sponsored elements from within shows," anchor Bob Ley said Tuesday on the program Outside the Lines.

DraftKings later announced it pulled Tuesday advertisements from ESPN, but it was unclear whether that would extend into the future.

"Draft Kings made the decision to pull their advertising for today, which we have obliged," an ESPN representative told USA Today.

An ESPN representative told CNN Money the network will continue to evaluate its response to the growing scandal.