San Francisco, Fall 2015
“Cory Albertson? Am I speaking to Cory Albertson?”
Trying his best to mask his excitement over hearing the instantly recognizable voice on the other line, Cory replied, in as muted a tone as possible, “Yes, this is . . . him.”
All week long he had been expecting his phone to light up with a call from this famous sports analyst, a former NFL player who was now a talking-head fixture on NFL Sundays, but even still, as he sat on his living room couch, he had to pinch himself as he listened to the unmistakable voice.
“Cory Albertson!” the famous broadcaster, the Legend on the other end of the call, said. “I hear that you, Cory Albertson, are the wizard—the brains behind it all!—the guy behind DraftKings and FanDuel!”
Cory was alone in his downtown San Francisco apartment, trying his best to process the moment. Around him was a space outfitted for the life of a professional fantasy games player: a plasma-screen TV set hung from the wall, a standing-desk workstation with dual monitors sat in one corner of the room, a treadmill and yoga ball rested in another, and windows with a sick view of the oceanfront and downtown baseball stadium, which now sat empty, like an unopened present, with its glistening corners. It was September, that beautiful stretch during which the NFL and baseball regular seasons overlapped and as the daily grind of baseball collided with the intense crescendo of an NFL Sunday, Cory spent full days staring at a screen, toggling from spreadsheet to spreadsheet while sifting through injury reports on Twitter and messaging with his partner, Ray, the hourlong stretches at his desk broken up only by occasional walks to his refrigerator filled with kombucha drinks. Cory’s head had been drowning in stacks and fades and overlay numbers, EVs and ROIs, when his phone lit up.
The man behind FanDuel and DraftKings? Yes, that was an odd, and inaccurate, way to describe Cory, and perhaps it showed the Legend’s lack of understanding of the industry, which was not a surprise, even though the Legend was employed by a network that had a stake in a daily fantasy company. If you were a prominent figure in the sports world, and especially if you were a former star like the Legend and hadn’t had meetings with representatives at either FanDuel or DraftKings about a potential partnership or ownership stake in a company, then, well, you either needed a new agent or you weren’t nearly as famous as you thought. By now, the four professional sports leagues that had wanted no part of fantasy sports for decades were entering this world through the oddly shaped and narrow side door of daily fantasy sports. Suddenly, just about every media conglomerate—CBS, ESPN, FOX, NBC—had partnerships with a daily fantasy operator, and Jason Robins’s vision of the industry as a virtuous circle was becoming a reality. A dozen teams from the NFL, the very league that had been most resistant to sidling up to something that smelled even remotely like gambling, had struck partnerships with either FanDuel or DraftKings, those companies’ names plastered all over stadiums. Two of the most prominent team owners in the NFL, Jerry Jones of the Dallas Cowboys and Robert Kraft of the New England Patriots, were investors in the space, with an equity stake in DraftKings. A number of prominent athletes held equity stakes in the companies, including a Hall of Fame NFL quarterback whose early investment was one of the worst-kept secrets in the industry.
The Legend was just the latest sports celebrity to want a piece of the pie. He wasn’t interested in a stake in a company; he wanted to launch his own. The Legend had been given Cory’s name by a mutual acquaintance and was calling Cory because he needed help getting his venture off the ground.
“I need your help, Cory!” the Legend was saying. Is this real life? Cory thought to himself.
Cory had expected the call to be a job interview of sorts; instead, it was a brief conversation that ended with an invite. In a few days, the Legend explained, he would be in New York City to meet with with the president of a major cable network. They were all going to get together to discuss a potential fantasy games business. What that business was, exactly—well, the Legend needed the wizard behind FanDuel and DraftKings to come up with some ideas and make a play at some of this fantasy sports money being thrown around.
There was a time when Cory could imagine daily fantasy as a multibillion-dollar industry and, yes, the future of sports media, and you could still persuade Cory that there was a massive upside to fantasy sports—but his perception of daily fantasy as an industry that was here to stay had changed during that dinner in Miami when he listened to Deep Throat paint a picture of doom as he pointed out how shortsighted it was to unleash a massive advertising campaign for an industry with such uncertainty around it from a legal standpoint. A reckoning, Cory thought, was coming, one spurred by the negative optics that could have been avoided but were being created by that massive advertising campaign pointing to an industry that had been completely unregulated.
Just one week after that weekend in Miami, one week after Cory watched the ads from his cabana and imagined the world seeing the commercials and asking, What is this?, a US congressman who’d undoubtedly seen the commercials was doing precisely that. Cory was familiar with Frank Pallone, the congressman from New Jersey, because Pallone had led the crackdown on online poker just six years earlier and had pulled the rug from under Cory and thousands of professional poker players. Representing the interests of a state that had been mired, since the passage of the Professional and Amateur Sports Protection Act in 1992, in a seemingly interminable if not Sisyphean battle to offer legal sports betting of the traditional variety, Pallone called for a congressional hearing into daily fantasy. Why, Pallone asked, was daily fantasy being treated differently from traditional sports betting? Why were regulators allowing gamblers to be deceived into thinking they could easily win million-dollar prize pools? Why were daily fantasy advertisements playing so frequently on television that his office was actually fielding complaints?
“Anyone who watched a game this weekend was inundated by commercials for fantasy sports websites—and it’s only the first week of the NFL season,” Pallone said in his statement.
Within days the attorney general in Massachusetts announced that her office was looking into the legality of these games. The vision that Deep Throat had presented to Cory just days earlier in Miami was already becoming a reality.
Yes, a reckoning was coming, Cory thought—but first he had a plane to New York to catch.
When Cory was young, his father was laid off from Caterpillar, the company he’d worked at for nearly two decades, and Cory, who was born into a trailer park in a small town in southwest Indiana, into a family that was always one missed paycheck away from dire poverty, learned something about how hard it was to draw a regular paycheck in this world. Through the constant current of uncertainty and fear they lived with, his parents held on to religion, and for most of his formative years Cory was such a devout Christian that during high school he led Bible study classes and even converted a handful of his friends. Cory grew up without the internet in his home and ignored his parents’ wishes to stay away from the evils of the online world only when he snuck off to the library, found a computer, and logged on to check his fantasy football team. He played trombone, had acne, was overweight, got the varsity letter for keeping stats for the high school baseball team, and then enrolled in the nearest major university, Ball State. His worldview began to change there; after growing up in a household in which connection to the outside world was prohibited, Cory, at Ball State, suddenly had access to everything, because as far as he was concerned, having the world of information at your fingertips was like an epiphany; the world just seemed so big. It was during his freshman year of college that he began following the story of an accountant from Nashville named Chris Moneymaker, an unknown in the poker world who went on to win $2.5 million at the World Series of Poker. Like countless college students in the early 2000s, Cory, inspired by Moneymaker’s story, began playing poker online. Cory was one of the very few who was immediately good at it. He was even better at daily fantasy.
The fact that he’d earned a living doing both: what did that make him? A “gambler”? He’d always disliked the term because of all its negative connotations. In fact, he hated most varieties of gambling; he had last stepped foot in a casino in 2007, and he hoped that he never stepped foot in one again. He’d become estranged from his parents in recent years. He was still self-conscious about what his parents thought of a moneymaking pursuit in a world that could not be further removed from theirs. And yet, it was becoming clear to him that he had to find a way to accept that a gambler was precisely what he now was. Some—and certainly anyone in his parents’ circle back in Indiana—might go so far as to call him a “scoundrel” because of his line of work, which was fine, Cory thought, just as long as those very same people recognized that what he did was ethically no different from what, say, a trader on Wall Street did. Or what a media conglomerate did when it swallowed other businesses whole in acquisitions, putting at risk thousands of employees whose pensions and 401(k)s hung in the balance. Or what venture capitalists—playing with not their own money but with the money of university endowments, pension funds, and insurance funds—did every time they made a new bet on a group of pimple-faced millennials with a story to tell. Every business was an exercise in managing risk, and making money off calculated risks—wasn’t that what the entire business world did essentially? The only difference at the end of the day was the size of the bets. The only difference was that a day trader or a CEO put on a suit every morning and went to an office, while Cory rolled out of bed, got on his treadmill desk, and could go to work in his underwear.
If anyone had any ideas about a job that he could do, and do well, he was all ears! The money allowed him to live a life away from the trailer park and not fret about the consequences of a missed paycheck. It allowed him to have a comfortable apartment in downtown San Francisco, and now that nerd from Warsaw was being flown out to New York City and was hanging out with some of the most powerful people in the sports and media industry. In New York, the plans for his visit were vague, other than that he was to show up for a dinner in a Manhattan restaurant at an appointed time.
“Cory Albertson!” the Legend said, spotting him at the dimly lit restaurant. Cory sat down at a table with the Legend, a handful of the Legend’s business associates, and a man in a suit—the network president. Cory understood why the TV executive, whose network made gobs of money airing live sporting events, was here and would be interested in talking about fantasy sports. He understood why TV networks, whose business model relied on the ratings and advertising dollars of sporting events, were exploring options for new money streams. Fans were beginning to cut the cord on cable packages, and overall viewership, which had been decreasing for years—ratings in the NFL and NBA were all trending downward—was now dropping at an alarming rate. It was a harsh reality for networks and leagues, but one they had no choice but to face: eventually all TV would be streaming TV, and soon the billions made from TV live-sports-rights deals would dwindle. All the media players who were looking for an answer to this problem watched as two little startups raised hundreds of millions of dollars, virtually overnight, with a game that engaged with fans in a new kind of way. Couldn’t you just replicate what those companies did?
That was the question those at the table were presumably all here to answer. That is, once the Legend was done regaling everyone with stories from his years in the NFL and decades as a famous analyst, bouncing from one tale to another. With each one, laughter from the table filled the room around them. Cory had to admit that it was thrilling to be here with the famous and the powerful, knowing these people had the power to actually turn a half-baked idea—one of his half-baked ideas maybe—into a loft space occupied by an army of coders. Cory did have some ideas that he believed could change the world around him, or at least help a network stuck in a rut.
He had been thinking about a number of variations of next-level, in-game fantasy products that centered on allowing players to simultaneously follow their lineups and games in real time. Cory envisioned a second-screen experience tailored to your own fantasy lineup, a product that could automatically go to a game in which player’s team was at the goal line, about to score the points that would put your lineup over the top. The idea was a no-brainer: it was clear that features like those were the future of the industry, but it was always hard to simply explain an idea like that to a room full of rich people who’d never played fantasy games before.
At the steakhouse, they had their own private room. The Legend regaled the room with stories, and the network president talked about his vague visions for the future. Cory waited and waited and waited to be called upon so that he could present his thoughts and offer a picture of how they could offer new kinds of fantasy games. But as the dinner wore on, he started to think that no one was really interested in what he had to say.
Not until the network president turned to Cory and said, with a straight face, “You’re a degenerate gambler, aren’t you?”
Cory was taken aback. “Excuse me?” he said.
“You’re a degenerate gambler. Really, at the end of the day this is what you do, right? What you all are? Degenerate gamblers.”
Cory didn’t know what to say. “I’m sorry, I respectfully disagree,” Cory said, “with that term.”
To be called out as a kind of problem actor just because he played fantasy sports, and made a living off of it, seemed . . . odd. Perhaps it said something about how the rest of the world viewed daily fantasy sports.
He spent the rest of the dinner mostly silent. Maybe it was best for everyone if the fantasy player nerds just stayed in their little corner of the world of degenerate gamblers.
That’s more or less what Cory would do. Because after that weekend, he never heard from the Legend again.
He was in his hotel room, in Manhattan, getting ready to fly back home to San Francisco, when his phone lit up with the New York Times news alert: “Insider Trading Scandal Rocks Fantasy Sports Industry.” The nuke had gone off, just as Deep Throat had presaged, only a month earlier. Deep Throat had nailed it. Cory had imagined a number of doomsday scenarios, but an employee using internal data to win money wasn’t one of them. He, like many others, were caught off guard and didn’t see it coming—in retrospect it was obvious that employees shouldn’t play. The story did sound alarming to him, and his anger was immediately directed at the companies, which he felt had dropped the ball on protecting the industry. Cory felt no allegiances or loyalty to DraftKings or FanDuel. He viewed daily fantasy as a utility, like the water that comes out of the faucet. There was some management of what went into the water—you needed it to not have lead in it—but if the companies ceased to exist, there would be another company the next day to provide that utility. Cory’s immediate reaction was unlike that of most of his peers, who were attacking the Times for their reporting. Cory thought that maybe it wasn’t the worst thing for reporters to look into what was happening if there was, in fact, genuine fraud going on at the companies.
After the Times story broke, his phone began buzzing nonstop. A year earlier, while he was a student at Notre Dame’s business school, Cory had been the subject of a profile in the Wall Street Journal headlined “A Fantasy Sports Wizard’s Winning Formula.” (“He considers it hard to believe, though more plausible by the day, that the side business he started last year with $200 could actually make him rich.”) It was a splashy profile that was one of the first stories in a national publication about a daily fantasy player; as a result, Cory found himself becoming a go-to source for reporters in search of quotes, from the player’s perspective, on the fantasy sports industry. Now his phone was lighting up with calls from the New York Times and ESPN and NBC News, who wanted him to appear on a segment with Lester Holt. He said yes to a Wall Street Journal request to pen a first-person op-ed. Within hours of sending it out, it was posted online. It began:
Let’s cut to the chase here: Playing daily-fantasy sports games for money is gambling. And it should be regulated. I should know. Over the past few years, I’ve made millions of dollars playing these games on sites like DraftKings and FanDuel—the sites now at the center of a scandal.
Cory found himself virtually alone among the top sharks as someone who would speak critically of the companies. For starters, he thought it odd that there was no communication between the sites and the players—that the obvious expectation in the industry was that everyone needed to hush up and support the sites. All the players, it seemed, had lined up against Eric Schneiderman and the New York Times; everyone was attacking the Times for what the industry viewed as a hit piece on the daily fantasy sports industry instead of looking at the facts that it was reporting. Cory thought it odd that players were so eager to defend the sites without even knowing the total scope of what was going on in these companies. It felt to him almost like a smoke-filled-room type of conspiracy between players and sites, where it was in players’ best interests to protect the sites at all costs and, as a result, no other players were asking tough, probing questions.
After he wrote the op-ed, he got an email from one of the executives at a daily fantasy site, asking whether it was appropriate to be bringing up certain issues. The executive’s complaint was that Cory had mentioned pros taking on newer players—Cory had pointed out that that was a problem that needed to be addressed. “For starters,” he wrote, “no professional winning six figures at daily fantasy should be flooding $1 and $2 one-on-one contests against novices. Accordingly, Ray and I have opted out of playing daily fantasy contests that are below a $25 entry fee and with five or fewer participants on DraftKings and FanDuel. We have encouraged other high-stakes players to do the same. A fairer playing field should be the cornerstone of the industry. At minimum, the sites need to empower independent auditing and oversight of their operations—unless they want US congressmen to do it for them.”
Beyond the Ethan Haskell issue, which Cory agreed seemed flimsy at best, there were some truly troubling bits of information buried deeper in the stories. Cory had reached out to a casual daily fantasy player who was quoted in a New York Times story as having been challenged in head-to-head contests on FanDuel by a DraftKings executive. The player had believed that the executive was challenging him because he felt he wasn’t a very good player and thus would be easy to repeatedly win money from. Now, fresh off the Haskell headlines, the player also believed that the executive could have had access to inside information. Cory began to believe that this employee was looking up the losers on DraftKings and taking the email addresses from their account and challenging those email addresses to play them in games on FanDuel. He had no further info, but it was entirely possible to him that employees were using insider info regarding the relative ability of daily fantasy users and using that data to try to exploit them on DraftKings or FanDuel—attempting to prey on unsuspecting players while playing on the rival site. Suddenly Cory had a pile of questions: Was there a wider scope of players being defrauded in this sort of way? How did he know that an employee wasn’t just looking at his lineup every day a few minutes before the games locked and using those picks on FanDuel to play against these other people who were losing on DraftKings?
Cory was taken aback by the lack of outcry on the players’ parts—or at least, their lack of questions. Why did it seem like he was the only player asking them?
After those few days in New York City, Cory had been looking forward to going home and returning to his life as a daily fantasy player, though something was telling him that things would never be the same. Then, as he was walking through a cavernous, fluorescent-lit terminal at JFK Airport to catch his flight back to San Francisco, his phone rang.
“Cory Albertson? Is this Cory Albertson?”
“Yes?” Cory replied.
“This is Agent A—— with the FBI. The Federal Bureau of Investigation in Tampa, Florida.”
Cory stopped cold, in the middle of the terminal, surrounded by a mob of luggage-pulling travelers and screaming babies.
“I’m sitting here with screenshots of you sitting in $10,000 buy-in fantasy sports contests. Rayofhope. That is you, correct?”
“Yes . . . ?” Cory said.
“I’m here with my colleagues, four fellow FBI agents; we are here in the office. And we are interested—very interested!—in having a conversation with you. A conversation on record. Cory, I’m sure you’ve been following the news. And perhaps you are aware, we are investigating daily fantasy companies DraftKings and FanDuel. And we need your help.”
There was a pause.
“Cory? Cory—I don’t want to make you do this.”
Cory was clear-headed enough to know that what Agent A—— was saying was that while he didn’t want to make Cory do this, he could make him do it. The rest of the conversation was a blur. He would later only remember hanging up with a clear read on the conversation he’d just had. The FBI in Tampa, Florida, wanted him to come in as an informant and go before a grand jury. They wanted him to go under oath and help bring down the two daily fantasy companies.
But first, he had to go home. This whole week had felt like the longest trip he’d ever taken. In a daze, he boarded his flight, and settled into his seat. It was here, Cory would later say, that he let the moment get the best of him, when his fantasy life became a nightmare. Because now he was in front of those touch screens that let you order a drink, or as many drinks as you wanted, with three taps of your finger and a swipe of your credit card, a convenience that was dangerous if you were someone in Cory’s state of mind. The thing was, he knew that the scenarios running through his head were all almost certainly overreactions, but recent events had proven that anything was possible in a world that no longer seemed rational. He’d already wondered what town in Mexico he was going to have to move to in order to keep playing daily fantasy games on offshore sites. Now he was wondering if he was going to get a call from FBI agents in California.
The first red wine seemed like a not terrible idea to take the edge off, but then, as his head spun with these dizzying thoughts, one became two and two became three, and after the fifth or sixth he began to realize he was getting strange looks from the other passengers on the plane. After the seventh or eighth, those strange looks dissolved into a thicker fog. When he stepped out into the gate, he stumbled around like a zombie into the overpowering lights of the airport. No one was there waiting for him, and the only thing he wanted to do was get back on a plane and disappear to somewhere far away.