October 27, 2015 / 9:30 PM / 3 years ago

Sports fantasy trade association creates control board

(Reuters) - The main trade association of the U.S. daily fantasy sports industry said Tuesday it has created an outside control board to ensure that the fast-growing business operates honestly.

The Fantasy Sports Trade Association (FSTA), which has represented the industry since 1998, said it has formed the Fantasy Sports Control Agency to oversee the multibillion-dollar business.

Seth Harris, a former acting U.S. Secretary of Labor in the Obama administration, will run the control board, the FSTA said.

“The issues and opportunities facing the fantasy sports industry can be best addressed through an independent agency supported by the industry and its members,” Harris said in a statement.

“We are confident that an independent control agency can prevent any unethical, dishonest, or unfair behavior.”

The Justice Department is investigating whether the business model behind daily fantasy sports companies such as DraftKings Inc and FanDuel Inc violates federal gambling statutes.

FanDuel and DraftKings are privately owned and both valued at more than $1 billion.

Daily fantasy sports, which have developed in recent years, allow participants to draft teams in games played in just one day. They have allowed fans to bet with a frequency that some critics argue is akin to sports betting or gambling.

The industry has also faced criticism since news broke earlier this month that an employee at DraftKings won $350,000 from a $25 entry in an American football contest on the rival FanDuel site using what reports said appeared to be inside information.

Reporting by Steve Ginsburg in Washington; Editing by Eric Walsh

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