Inside DraftKings, FanDuel and the daily fantasy sports industry

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NEW YORK -- More bad news for the daily fantasy sports industry. Citigroup has announced it will now block transactions from DraftKings and FanDuel in New York while the two sites remain under criminal investigation.

In a three-month advertising blitz tied to the start of the NFL season, the two companies spent $230 million, running 44 different television ads more than 56,000 times -- all promising fast, easy action that could produce-life changing results.

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"Just pick your sport, pick your players, and pick up your cash, that's it," one DraftKings ad said. "It's the simplest way of winning life-changing piles of cash."

But last October, just as the sites were drawing as many as 200,000 new players a day, explosive allegations of fraud rocked the industry.

After a front-page story in the New York Times detailed allegations a DraftKings employee used inside information to win $350,000 in a contest on rival site FanDuel, company CEO Nigel Eccles knew he had a problem.

"When that broke, that's what really hammered home to me, is that we've done -- not done a good enough job to make people aware of, of, you know, how we're insuring fairness," Eccles said. "'Cause it absolutely goes to the core, which is everyone wants to know that these games are fair," he said.

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A company-backed investigation found no wrongdoing -- but the integrity of the games was now in question. New York Attorney General Eric Schneiderman opened an investigation into the websites and asked a state court to shut them down.

"These guys got very big, very fast and when my office and other regulators realized that they -- there was no agency anywhere in the country that was scrutinizing them, making sure that they were following rules, making sure the representations they made to gamblers were true -- we all had to move into action very fast," Scheneiderman said.

You can see the full report on "60 Minutes Sports" Tuesday, February 9th at 8 p.m. ET/PT on Showtime.