New York gaming regulators want DFS companies to prove they are keeping player’s accounts separate from their operating funds and not tapping into player’s money.
The move comes after small DFS site Fantasy Aces declared bankruptcy, leaving many player’s unable to withdraw from their accounts. About $1.3 million in player’s funds are estimated to be involved.
According to LegalSportsReport, DFS operators licensed in the state received emails from the New York State Gaming Commission asking for proof player’s funds are being kept separate from operating funds.
The commission asked for evidence that “clearly illustrates the legal mechanism and internal controls” that keep player funds safe from “corporate insolvency, financial risk, or criminal and civil actions against” DFS operators.
As for Fantasy Aces, the company’s bankruptcy lawyer Bert Briones told the Wall Street Journal that several potential buyers have emerged for the site that might be willing to assume responsibility for the $1.3 million owed to players. Briones said he was “confident that users are not going to lose their money.”
New York has been a tough market for DFS operators, including the two industry leaders DraftKings and FanDuel. New York Attorney General Eric Schneiderman brought consumer fraud suits against DraftKings and FanDuel, which were resolved last October after each company agreed to pay $6 million in penalties for “false and deceptive” marketing.
