The Unlawful Internet Gambling Enforcement Act of 2006 made transactions from financial companies to online gambling sites illegal, but carved out an exception for fantasy sports, classifying it as a game of skill. Since then, however, daily fantasy sports websites have exploded in popularity and are now worth billions of dollars because of a surge of investors, including national sports organizations, television networks, and team owners.

Fantasy sports recently came under scrutiny after an employee of one of the sites admitted to having released confidential information. The same employee then won $350,000 in a competition on a rival site. The New York and Massachusetts Attorney Generals offices have since been looking into the practices of both companies.

The Justice Department and the Federal Bureau of Investigation have also gotten into the act, conducting a probe into whether the fantasy sports operators are in fact a form of gambling and therefore in violation of Federal law.

In Congress, Representative Frank Pallone (NJ-D), the Ranking Member of the House Energy and Commerce Committee, has called for a hearing on the matter.

“Daily fantasy sports is functioning in a Wild West void within the legal structure,” Pallone said. “Like professional sports betting, fantasy sports should be legal, but both are currently operating in the shadows. With little legal oversight and deep investments into these sites by the same professional sports leagues that oppose traditional sports wagering, these issues are ripe for congressional review.”

Senate Minority Leader Harry Reid has also called for regulation of fantasy sports, stating:

“Daily fantasy sports is the only unregulated gambling operation in the country, and we have already seen the consequences of that with reports of cheating and insider betting. … And that’s in addition to the risks posed to children and young people who have the unfettered ability to gamble thousands of dollars a day with these unregulated companies. Without strong oversight, there is nothing stopping these terrible things from happening, and we will continue to see more corruption from this unregulated, illegal gambling.”

Hoping to avoid government regulation, the Fantasy Sports Trade Association has announced the formation of an independent Fantasy Sports Control Agency, tasked with creating a “strict, transparent, and effective system of self-regulation for the businesses that comprise the fantasy sports industry.”