Daily fantasy sports operator ThriveFantasy was seeking to raise capital in October 2023, just months before allegedly leaving customers seeking withdrawals in the dark, according to an investor deck obtained by LSR.
The attempt at fundraising was going on while the company was allegedly failing to process withdrawals for a number of customers. ThriveFantasy has frustrated customers who allege the daily fantasy sports operator failed to allow them to withdraw funds from their accounts.
At least some of those customers are allegedly owed five-figure balances.
ThriveFantasy: Investigation into possible fraud
After the initial report on the customer frustrations Jan. 8, ThriveFantasy CEO Adam Weinstein told LSR:
“We are investigating several of the accounts that you mentioned for potentially taking advantage of our Pick ‘Em product. All funds will be settled and processed if we see no fraudulent activity has taken place.”
Weinstein sent an email to customers on Friday. Most of the statements within are not independently verified by LSR:
Daily fantasy sports customer receives partial payment
One customer who is allegedly owed approximately $30,000 did receive a $4,000 payment from ThriveFantasy, he told LSR on Thursday. The last time the customer had been able to withdraw money from his account was in October.
“I’m hopeful this is the start of a new chapter, people being treated fairly by Thrive,” the customer told LSR. “It’s been a long time since that has happened.”
Are customers winning too much?
Another customer, who is allegedly owed a five-figure balance, received a message from ThriveFantasy last Wednesday, saying his account was under investigation for winning at a higher rate than the average customer.
“Please rest assured your funds are safe,” the message said.
However, given how it operates as a game of skill in most jurisdictions, it is a curious decision to lock an account simply because it wins too much.
Most customers did not want their names used for fear of being unable to recover their remaining account balances. Some only identified by first names.
ThriveFantasy investor deck
In the investor deck, ThriveFantasy said it was hoping to achieve profitability by Q3 2024.
The company said it had raised $8.4 million as of October 2023, including $3.8 million by Bullpen Capital. Raising a $3 million extension, ThriveFantasy said, could also:
- Continue to increase market penetration through partnerships and affiliates.
- Hire and develop our engineering team.
- Increase Prop Lobby Maximum Entry from $1,000 to $5,000.
- Capitalize on best in class, new UX/UI and expand product offerings.
Investor goals for Thrive
The ThriveFantasy advisory team included Paul Martino, Han Park (investor and advisor) and Bruce Hack (investor and advisory.)
In 2024, ThriveFantasy expected its number of unique depositors to be 135,000. It was also expecting $125 million in gross gaming revenue (entry fees) and $11.8 million in net gaming revenue (hold.)
According to the deck, “ThriveFantasy is able to operate in states that allow Fantasy sports. Providing for a larger potential user pool when compared to sportsbooks.” ThriveFantasy was available in 30 states, according to its terms & conditions.
ThriveFantasy does not respond to AG offices
According to documentation from Dane, a customer allegedly owed nearly $45,000, ThriveFantasy did not respond to a letter sent by the North Carolina attorney general’s office.
ThriveFantasy also did not respond to the New York attorney general’s office, according to Andrew, a customer who is allegedly owed nearly $25,000.
NY customer details failed attempts
Andrew was able to make three separate $20,000 withdraws from December 2022–February 2023. However, he has not heard from the company since.
“They have not responded to anything I’ve said (via email),” Andrew said.
ThriveFantasy also failed to respond to a demand letter from Andrew’s attorney.
“I’m still working to build a case of this being widespread, and submitting info to the New York AG’s office and hoping that they take action,” Andrew said.