DFS Site FantasyHub Suspends Operations, Leaving Players Unable to Access Balances
Posted on: February 22, 2016, 05:23h.
Last updated on: February 22, 2016, 05:23h.
DFS site FantasyHub appears to have bitten the dust, leaving players unable to access their funds. The daily fantasy sports operator left customers unable to access their funds over the weekend.
From Friday on, DFS players saw this message when they logged on:
“FantasyHub has temporarily suspended operations. Further updates have been made via email. We apologize for any inconvenience this may cause, but we are currently in discussions with a strategic 3rd party regarding the future of FantasyHub & its players.”
FantasyHub, whose USP was that it enabled its players to donate some of their winnings to charity, is the second small DFS operator to close in the past month, following FantasyUp.
The latter site imploded in January, informing its players that it no longer had the funds to continue and that it could not afford to return their balances.
FantasyUp Bailed Out
FantasyUp was rescued by the burgeoning iTEAM network, a DFS white-label platform founded by former MGM and Galaxy Resorts exec Gabe Hunterton and poker marketing agent Brian Balsbaugh.
FantasyHub’s reference to a third-party may suggest that it’s going through a similar process.
Based in Austin, Texas, FantasyHub was founded in 2014 by Kentucky native Andrew Busa. In an interview with Louisville Business First last July, Busa said his company had received $118,000 from startup accelerator TechStars to launch, and in July, was seeking $750,000 in seed funding in order to develop a mobile app and add competitive gaming leagues.
Busa said by the first quarter of 2016, he planned a Series A round to raise between $3 million and $5 million, although that could grow to $15 million, he added, “depending on what happens between now and then.”
Were Balances Segregated?
What happened between now and then is unknown, but it doesn’t seem to have worked out quite the way that Busa had envisioned it.
We can only hope that players’ balances are safe. FantasyHub is a member of the Fantasy Sports Trade Association, whose operators pledge to keep their players’ funds segregated from their operating funds, but as the DFS industry remains unregulated by a third-party watchdog, there is no way of knowing if this actually happened.
Many states are looking at regulating daily fantasy sports sites, most notably California, the industry’s second-biggest market. Such regulation would enforce segregation of player funds and protect consumers, opening operators up to full transparency and accountability.
In the meantime, this kind of bad press is the last thing the DFS industry needs right now.
An email sent to players over the weekend apologized for “radio silence” and assured that the company would “be in touch very soon with full information.”
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