A deal to consolidate two daily fantasy sports operators has apparently fallen through, with little information provided about why.
FantasyDraft + Fantasy Aces = no more
Late last week, two DFS operators announced a pending deal. In that deal, FantasyDraft had agreed to purchase the user database of Fantasy Aces.
Just a few days later, however, FantasyDraft said it pulled the plug on that deal:
Unfortunately, because of issues identified during our due diligence, we are unable to purchase the assets of FantasyAces. We will continue to provide the best possible daily fantasy experience for our users, and are committed as always to putting our Players First.
That page at FantasyDraft used to contain information about the closing of the deal. The company said it expected the deal to take three to five days to close. Player accounts were supposed to be migrating from Aces to FantasyDraft, once the deal was complete.
Player funds in limbo
Players have not been able to access their accounts or the Fantasy Aces platform while the parties attempted to close the deal. Even before the sites announced the deal, there had been anecdotal reports of users not being able to access their funds.
It’s not clear why players could not access their funds during the process. Player account funds are supposed to be kept segregated from operational funds at any DFS site. That’s per the paid-entry contest operator charter of the Fantasy Sports Trade Association, of which Fantasy Aces is a member. The FSTA, however, conducts no enforcement on this point.
Segregation of player funds is also a tenet of a number of DFS laws passed in 2016. That includes in New York, where Fantasy Aces has a temporary permit to operate. For players that have had problems cashing out, they can contact a number of states where DFS is regulated and Aces serves users:
- New York: 518-388-3300; [email protected]
- Mississippi: [email protected]
- Tennessee: 615-253-6658; [email protected]
- Maryland: 410-260-4055; [email protected].
- Massachusetts: http://www.mass.gov/ago/contact-us.html
What’s next for Fantasy Aces?
Fantasy Aces declined to comment to Legal Sports Report. Its website, which used to direct players to FantasyDraft, now only says “An update coming shortly, please stand by.”
Fantasy Aces is a publicly traded company, but a stop on trading of shares has been in place for more than a week. The company issued a press release about its pending deal with FantasyDraft, so one would expect a similar update for shareholders now that the deal has fallen through.
It’s not immediately clear if the site will simply reopen for business, or remain inactive for the time being.