Fantasy Aces Site Busts, Leaving Players Out $1.3 Million

Customers experienced a nightmare this week, when Fantasy Aces filed for Chapter 7 bankruptcy protection, freezing accounts amid an uncertain future. The site is the largest daily fantasy sports behind industry leaders, DraftKings and FanDuel. Players were notified via email that the site was “temporarily shuttered” and that “all accounts are on hold.”

Fantasy Aces

Brothers Brian, left, and Trent Frisina co-founded Fantasy Aces, a daily sports fantasy site that filed for Chapter 7 bankruptcy protection this week. (Image: Orange County Register)

The bankruptcy filing suggests that Fantasy Aces had not segregated player funds from operational costs. Players, according to the filing, are owed $1.3 million, while an account listed as “Players Account” contains just $2,419. The company also stated it has assets of $1.8 million, which will be liquidated to pay $2.96 million of creditor liabilities.

Hail Mary Rescue Deal Fails

Fantasy Aces had announced only last week that it would be bought out by rival site, but that deal fell through. Fantasy Draft announced on Twitter that it would not be pursuing the deal because of “issues identified during our due diligence.”

Two days after the failed merger, Fantasy Aces sent the following email to its customers: “After spending over a year attempting to secure long-term capital, including recent negotiations with two notable companies which subsequently failed to close, we are left with an unresolvable financial burden and have spent every waking minute attempting to find a solution for our players most importantly.

“We have unfortunately exhausted every possible financial option with no success. We fought as hard as we could, in the end without a major infusion or acquisition we just were not able to make it.”

Industry Regulation Tested

This is not the first time DFS companies have found themselves in severe financial difficulty. In early 2016, FantasyHub and FantasyUp were both unable to pay their players until they were bailed out by DraftKings and the iTeam Network, respectively.

The situation is reminiscent of online poker’s own scandals and the failure of sites like Full Tilt, Lock Poker, and Everleaf to segregate player funds. The difference is that online poker has never been licensed and regulated in the United States unlike Daily Fantasy Sports.

Last year, eight states, including New York, passed laws to legalize and regulate the contests with differing degrees of severity. Most included provisos that companies must segregate funds. The attorneys general in those states have the option to investigate Fantasy Aces and prosecute on behalf of players if it is proved that funds were co-mingled.

Philip Conneller
Written by
Philip Conneller
As part of the team that launched Bluff Magazine back in 2004, and then as Editor of Bluff Europe, Philip Conneller has (probably) written thousands of articles about poker and has travelled the globe interviewing the greatest players in the world, not to mention some of the sexiest celebrities known to man in some of the world’s sexiest destinations. The highlight of his career, however, was asking Phil Ivey (as a joke) how to play jacks, and emerging none-the-wiser. Philip once won $20,000 with 7-2 offsuit. He has been told off for unwittingly playing Elton John’s piano on two separate occasions, on different sides of the Atlantic Ocean. He became a writer because he is a lousy pianist. He lives in London where he spends his time agonizing about Arsenal football club, yet in Wenger he trusts.

Comments

99TERRANCE99 wrote...

Thats right messed up so people are out that money :/ but creditors always get paid

eberetta1 wrote...

Third largest fantasy sports site. Unbelievable. Thought fantasy sports was a cash cow.

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