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According to the filing — first reported by Fantasy Alarm — Fantasy Aces apparently used player funds for operations.
As a result of Aces filing for Chapter 7 bankruptcy, it appears unlikely that players with money in their accounts will receive much, if anything, as a result. Players at Aces had not been able to access their accounts for more than a week.
A visit to Fantasy Aces’ website still only tells users that an “update is coming shortly.”
Fantasy Aces — a publicly traded company on the TSX Venture Exchange — filed for bankruptcy in the Central District of California.
You can see the filing Aces below. (Legal Sports Report is publishing only the first 12 pages of a 90-page filing. Much of the rest of the filing includes names and addresses of Fantasy Aces principals and creditors owed, and is available via PACER.)
Chapter 7 is a version of bankruptcy in which a company’s assets are liquidated.
What we can glean from the filing:
How and why this player accounts are nearly empty is unknown.
Fantasy Aces had announced that it was being acquired by another operator — FantasyDraft — last week.
However, FantasyDraft backed out of that arrangement before the deal closed, citing “issues identified during our due diligence.”
Those issues are now pretty clear in retrospect. Previously, Aces had issued a corporate update about the sale, and a stop on trading of its shares had been put in place by regulators.
Fantasy Aces is under the regulatory schemes that are coming online in several states. As such, players in those states should contact those regulators to see what recourse, if any, might be available:
This is not the first case of a DFS operator apparently dipping into player funds for operational purposes.
In 2016, other operators acquired at least two other sites in bailouts: