Stolen money. Lies and deception. And yet another black eye for the
daily fantasy sports industry.
Fantasy Aces, bankruptcy and DFS
Today, it became official. Fantasy Aces, a company that had deliberately misled its players, filed for bankruptcy. It appears unable or unwilling to pay more than $1 million it should have on hand to give players back their money.
Unless Fantasy Aces is simply terrible at communicating the reality of its situation to its players, this seems to me to be a clear case of fraud.
Fantasy Aces executives must be held accountable for their gross negligence. I am calling on the state regulators who authorized or gave a license to Fantasy Aces to lead the charge to go after these individuals and get back whatever funds they can for the victims, the Fantasy Aces players.
Jail time may be the only deterrent that will be effective to ensure nefarious operators do not commit the same behavior in the months and years ahead. As an industry, we cannot allow this to keep happening.
Excuses don’t cut it in DFS
It is not easy to run a company. Some companies don’t survive. But that is not an excuse for taking player money – which effectively serves as individual bank accounts – and EVER using it for company operations.
Here is what Fantasy Aces used to have on its website, before it shut down:
Are you looking for a more exciting way to play fantasy sports? Then you’ve come to the right place, where you can use your knowledge of professional athletes to win real cash and have the confidence of knowing your funds are safe! Fantasy Aces LLC is a US based fantasy sports website owned and operated in Southern California and our members funds are held in a segregated US bank account, separated from our operational accounts.
That obviously wasn’t the case.
The Fantasy Aces executives are the biggest culprits in this debacle. But they are not the only ones to blame. The forums and sites who promoted this company – even when they knew the company was delaying or not making good on payments to them – also must accept responsibility for their part in defrauding players. Lastly, state regulators MUST do more to ensure that player funds are truly separate from operational funds.
No company wants more regulation. But if independent audited reviews are what is needed to make sure this doesn’t happen, so be it. But most of all, there need to be consequences for illegal activity. And those consequences should include jail time if indeed the site’s executives knowingly used player funds to fund their failing operation.
Segregating funds in DFS
At Boom Fantasy, we will always operate with integrity. We calculate and monitor overlay expenses daily, and we continually ensure that our players’ account has more than enough to cover all player balances and pending bonuses. Not only do we keep our players account and operations account separate — which is mandated by law — we have 7x more money in our operations account, as we are funded through early 2018.
There will always be bad actors out there (either through incompetence or downright negligence). But as an industry we must do more to snuff them out and to hold them accountable.
The industry must do better.