DraftKings pulls advertising from ESPN amid questions of inside trading

DraftKings pulled its advertising from ESPN on Tuesday after the daily sports company became engulfed in questions this week about possible insider trading.

Asked if the company’s advertising has changed, an ESPN spokesman told USA TODAY Sports that "Draft Kings made the decision to pull their advertising for today, which we have obliged."

It’s not clear if the programming will be pulled beyond Tuesday. Meanwhile, ESPN also had made a separate decision to scale back on DraftKings sponsorship graphics and language within its programming.

ESPN spokesman Paul Melvin said this was being done to avoid the appearance of a conflict of interest.

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"It is a standard procedure for us pull these kind of sponsorships and integrations when we are covering breaking news,” Melvin said in a statement issued to USA TODAY Sports. “We look to avoid any suggestion of influence on our coverage."

This included sponsorship of specific programming, often followed by the tagline “brought to you by DraftKings,” along with graphics coming into and out of televised shows and segments. Those positions were exclusive to DraftKings as part of exclusive advertising arrangement with ESPN announced earlier this year.

A message seeking comment from DraftKings was not immediately returned.

Both DraftKings and its chief rival, FanDuel, have bombarded television sports programming with advertising during the current NFL season as part of an effort to lure in more customers. FanDuel has not pulled its ads from ESPN.

Both companies faced questions about possible insider trading when a DraftKings employee won $350,000 in a daily fantasy contest on FanDuel.  With insider access to data showing which players are the hottest players to own that weekend, the theory is that somebody could use that information to spot market inefficiencies and improve his or her chances of winning against the group.

The companies released a joint statement this week that there is no evidence that any employee or company has violated rules restricting access to and use of competitive data for use on other sites.

"That said, the inadvertent release of non-public data by a fantasy operator employee has sparked a conversation among fantasy sports players about the extent to which industry employees should be able participate in fantasy sports contests on competitor sites," the joint statement said. "We’ve heard from users that they would appreciate more clarity about the rules for this issue. In the interim, while the industry works to develop and release a more detailed policy, DraftKings and FanDuel have decided to prohibit employees from participating in online fantasy sports contests for money."

Follow sports reporter Brent Schrotenboer on Twitter @Schrotenboer. E-mail: bschrotenb@usatoday.com