Fantasy Aces’ situation seems to be alarming for its customers who are unable to withdraw their funds. Then the states that have regulated DFS have a duty to prosecute if the stricken company has co-mingled customers’ funds with operating costs.
Day-to-day fantasy sports (DFS) operator Fantasy Aces filed for bankruptcy this week following a rescue that is last-ditch by competitor Fantasy Draft fell through.
Alarmingly for players, it seems from the bankruptcy filing that the company is unable to pay significantly more than $1 million of players’ funds, and it has co-mingled customer money with its running expenses.
‘The Fantasy Aces team truly regrets to announce that we are not able to sustain our site and company operations effective January 31st 2017, filing for protection under Chapter 7 bankruptcy law,’ the business told its clients on Wednesday.
‘After spending more than a year wanting to secure long-term capital, including recent negotiations with two notable organizations which subsequently neglected to shut, we’re left with an unresolvable financial burden. We have unfortunately exhausted every possible option that is financial no success,’ the California-headquartered DFS company concluded.
Will Regulated Jurisdictions Prosecute?
Consumer protections and also the requirement for operators to segregate player funds was a major driving force behind states taking steps to regulate the DFS industry last year.