DraftKings

Bets may be off for the fantasy football industry—a fast-growing ad category for radio and other media—as lawmakers continue to contemplate whether the business constitutes an illegal form of gambling. Odds for a good outcome grew longer on Friday when gaming attorney Daniel Wallach announced that a federal grand jury in Tampa is investigating whether fantasy sports companies are violating a law originally enacted to target gambling ventures that enrich mafia families.

A story Friday in the Washington Post outlined a feud between fantasy football leaders DraftKings and FanDuel revolving around “allegations that an employee profited off insider data.” The New York Times reported last week that an employee of DraftKings used insider information to place a bet on FanDuel and won $350,000.

According to The Post report, “A scandal-fueled crisis of confidence among fans, swelling resistance from lawmakers and fresh doubts from even some of its top allies have given the fantasy sites their biggest reality check yet. The controversy now threatens to undermine an industry that exploded over the last year to become one of the nation's most unavoidable forces in advertising.”

Sen. Rob Bradley, a North Florida Republican and lead negotiator on gambling issues in the Florida Senate, said DraftKings and FanDuel “are promoting a product that looks a lot like sports betting,” according to the Tampa Bay Times.

According to TV commercial analytics company iSpot.tv, DraftKings and FanDuel have been among the top 10 national advertisers over the past 30 days. Both spent more money and aired more commercials than Ford, Chevrolet and McDonald’s.

Despite the controversy, ESPN, which had banned segments on the companies in the wake of the allegations, resumed them last Friday.

As Inside Radio previously reported, DraftKings spent $4.5 million on radio ads in 2014 while FanDuel allocated $5.2 million, according to Kantar Media.