New York DFS Operators Under Scrutiny Over Funds Misuse
After the recent Fantasy Aces affair, New York gaming operators are looking into the operations of the state’s daily fantasy sports (DFS) operators.
Fantasy Aces last week’s bankruptcy filing spurned an an outrage among the large number of their customers, since it left them unable to claim the winnings on their online accounts, which stand at around $1.3m.
It is suspected the Fantasy Aces owners tempered with the assets of their clients, using them in their own financial operations as the firm’s operating capital.
DFS Operators Under a Watchful Eye
This is exactly why the State Gaming Commision is now requesting that all DFS operators, operating in the state of New York, submit documentation proving the player funds are clearly and undoubtedly segregated from the cash flow and that it can not be used as a private asset.
The recent dealings at Fantasy Aces confirmed the earlier suspicions that player funds were used by operators for their own purposes. However, it is still unclear whether these doubts influenced the decision made by FantasyDraft, another major New York DFS operator, to back up from the acquisition of Fantasy Aces.
It seemed it was a done deal, but FantasyDraft mysteriously withdrew from the process just a couple of days after it had been announced.
But, still there is hope for now former clients of Fantasy Aces. The company’s bankruptcy lawyer, Bert Briones, confirmed there are “multiple parties interested in acquiring the company’s assets”. Any takeover would oblige the future buyer to pay up the owed money. Briones remains confident that Fantasy Aces client will not lose their money.
New York is very strict when it comes to legal regulation of DFS. Last October, the State Attorney General’s suit against DFS operators, DraftKings and FanDuel, reached its conclusion and the two leading operators agreed to pay over $6m each in penalties for what was described as “false and deceptive marketing”.