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Local Fans Weigh In On Alleged Fantasy Football Scandal

PHILADELPHIA (CBS) -- Fantasy football is reportedly dealing with a big scandal, and two major fantasy sports companies are allegedly involved.

For many, it's the lure of easy money.

(Reporter:) "When your friends play, do they make a lot of money?"

"Yes, I have one friend that is actually up about $1,200 right now," said Michael Massaro of New Jersey.

On game days, and seemingly every day this fall, the ads are everywhere. Now, so is the cash.

But their business model is under the microscope after allegations of what essentially amounts to "insider trading."

"I just don't understand how that can be so unregulated," said a local football fan.

According to a report in The New York Times, a Draft Kings employee allegedly admitted he released early data on what specific players were most used in starting lineups ahead of the NFL's third week. Getting that early information ahead of the curve could serve as an advantage. The employee reportedly went on to win $350,000 later that week betting on rival fantasy football website, Fan Duel.

"If you're play against a fixed team you're never going to have a shot," said Nick Dambach of New Jersey.

In a joint statement, the industry leaders Draft Kings and Fan Duel defended their practices, in part saying: "employees with access to this data are rigorously monitored by internal fraud control teams, and we have no evidence that anyone has misused it."

The sites can pay out massive cash prizes on a daily or weekly basis.

The federal government doesn't define it as gambling, instead calling it a game of skill not chance.

"This business is very unregulated. I mean seriously we've come a long way from the dorm room playing amongst your friends to now the corporate sphere that is fantasy football," said Brandon Robinson with CBS Sports Radio.

CBS 3 Eyewitness News caught up with fans at Chickie's and Pete's in South Philadelphia.

(Reporter:) "Do you think there needs to be more government oversight?"

"I don't think that the government should be involved, no," said Barry Ramsey of Virginia.

(Reporter:) "So this isn't really going to dissuade you from playing?"

"Probably not," said L.J. DiStefano of Philadelphia.

DraftKings and FanDuel both ban employees from taking part in gaming on their own sites, and have now temporarily barred employees from taking part in other rival sites as well.

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