Fantasy Site Goes Under; Players Out $1.3 Million
The New York Gaming Commission has launched an investigation into Fantasy Aces, a daily fantasy sports site that filed for bankruptcy in January without funds to pay its players.
According to The Wall Street Journal, the company has hired attorney Robert J. DeGroot, a criminal defense lawyer, to work with the commission to resolve the player compensation issue.
The commission began monitoring DFS last August after the state enacted a bill to license and regulate the industry, one of eight states to do so last year. On August 22, the first temporary licenses were issued, one of which was granted to Fantasy Aces.
A condition of licensing was that licensees keep player funds segregated from operating costs. But Fantasy Aces’ bankruptcy filings state that players are owed $1.3 million, while an account listed as “Players Account” contains just $2,419. The company also states it has assets of $1.8 million, which will be liquidated to pay creditors, but it also has liabilities of $2.96 million.
Fantasy Draft, a rival site that had been close to purchasing Fantasy Aces prior to the bankruptcy filing, has said it would step in to cover the player balances to maintain the industry’s reputation.