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FantasyDraft will also pay a large amount of money owed to players by the now insolvent site as part of the deal. The DFS operator will be giving Fantasy Aces players up to $1,000 cash to cover missing account balances, plus other benefits for those users owed more.
That money accounts for a vast majority of the nearly 31,000 player accounts at Fantasy Aces. A small percentage of users had more than $1,000 on the site.
“We felt that helping the Fantasy Aces players was the right thing to do and fortunately we were in a position to do so,” FantasyDraft CEO Steve Krombolz told LSR. “It is a big commitment to invest what is a significant amount of time and money but at the end of the day we felt it was the right decision for both the players and FantasyDraft.”
Fantasy Aces closed its doors in January, and soon thereafter filed for Chapter 7 bankruptcy protection. Filings in that case showed that Aces owed about $1.3 million to “various user accounts.” That’s despite the fact that the company said it was segregating player and operational funds. Aces only had about $3,000 in cash in accounts earmarked for players, according to those filings.
Soon thereafter, FantasyDraft announced its intention to bail out a large portion of those player funds.
While court filings were not yet available, Krombolz told LSR that the bankruptcy court for the Central District of California had approved the arrangement. Earlier filings had confirmed that FantasyDraft had offered to acquire Aces’ player database in exchange for making many of Aces’ players whole.
Krombolz told LSR that players should be able to access their funds and play with them at FantasyDraft, soon, possibly as soon as today.
“We were told we should have the complete player list today,” Krombolz said. “We custom built code allowing Fantasy Aces players, both new to FantasyDraft and existing users, to claim their funds in an seamless automated process.”
“Once they have confirmed theirs identity the funds will be available for play immediately,” Krombolz continued. “Assuming the data comes today, which is should, we will notify users and they will be able to play today as well.”
Players with under $1,000 in their accounts will simply get cash in their FantasyDraft account. Here is how it works for players with more money in their Aces accounts:
Players with a Fantasy Aces cash account balance between $1,000 – $5,000: We will provide $1,000 Cash + Remaining balance in FantasyCash up to $4,000 ($5,000 total)
Players with a Fantasy Aces cash balance >$5,000:
That’s a pretty good deal for former Aces players, who certainly could have ended up with nothing from the entire situation.
“We take pride in our product and the way we do business and believe that the new Fantasy Aces players will like what they see and will stick around which of course helps us in the long run,” Krombolz said, noting that FD has an iOS app release planned for March. “They are by no means obligated to do so but again we are confident in our product offering.”
Krombolz said FantasyDraft is committed to segregation of player funds, noting that it has registered or been licensed in every state that passed a fantasy sports law in 2016.
“If you look at our history we have a pattern of doing things the right way,” Krombolz said. “We have never taken short cuts and I feel that is evident in everything we have done leading up to today.”
As part of the fallout of the Fantasy Aces debacle, New York state regulators asked all sites with a temporary license for proof of segregation of player funds. (LSR has confirmed that regulators in Missouri have taken similar steps.) Krombolz said his company “submitted a lengthy list of documents to the regulators in NY,” in cooperation with their request.
“I can assure our players, and I am on the record many times stating this, that their funds are held in a separate segregated account held by FantasyDraft Player Funds LLC, a subsidiary of Fantasy Draft LLC, as prescribed by law,” Krombolz said. “These funds are never mingled with our operating funds.
“Our company is run by a group of seasoned business professionals with 60-plus years of combined experiences running both small and large enterprises, private and public,” Krombolz continued. “I think this is an important piece of the puzzle that may have been missing with some of the other operators you have seen run afoul. ”