Following the sudden collapse of mid-major daily fantasy sports (DFS) site Fantasy Aces, players who were left in limbo have been offered a reprieve courtesy of rival DFS platform FantasyDraft.
Per a press release issued on February 13, the owners of FantasyDraft have reached an agreement with the bankruptcy trustee handling Fantasy Aces’ dissolution. As part of that agreement, FantasyDraft obtained information on player accounts and related balances in hopes of reimbursing player funds.
In the statement, FantasyDraft outlined a plan to commit cash on hand to pay the vast majority of Fantasy Aces players back,
“As members of the DFS community, committed to doing things the right way, we feel that we need to do our part to protect the lifeblood of the industry: the players.
Through this agreement, we have committed to reimburse Fantasy Aces players up to $1,000 cash to cover missing account balances, this makes 99.6% of the players whole.”
As for the small group of Fantasy Aces players with balances between $1,000 and $5,000, Fantasy Draft will provide $1,000 in cash before paying off the remaining funds with FantasyCash – or credit available for wagering on their site.
Players with more than $5,000 stuck on Fantasy Aces will receive $1,000 in cash, $4,000 in FantasyCash, and the remaining balance as an earnable bonus.
All reimbursement terms are conditional, pending court approval of the agreement reached between Fantasy Draft and FantasyAces’ bankruptcy trustees.
The agreement seemingly concludes a whirlwind month for the two former DFS competitors, one which began in late January with the announcement that FantasyDraft was poised to acquire Fantasy Aces.
At that time Fantasy Aces, which was founded in 2012 by brothers Brian and Trent Frisina, ceased running real money contests in anticipation of transferring player accounts to FantasyDraft.
A day later, on January 30, FantasyDraft issued a brief statement pointing to “issues identified during our due diligence” which left the site “unable to purchase the assets of Fantasy Aces.”
Within the week, as speculation mounted about Fantasy Aces’ financial situation, players’ worst fears were confirmed. Fantasy Aces filed for Chapter 7 bankruptcy in the Central District of California, before informing players that the site was “temporarily shuttered” with “all accounts on hold.”
Fantasy Aces also sent an email to its player base which claimed that the site was suffering from unforeseen financial burdens:
“We have unfortunately exhausted every possible financial option with no success. We fought as hard as we could, in the end without a major infusion or acquisition we just were not able to make it.”
But as initial bankruptcy files were submitted, it became clear that Fantasy Aces’ failure was self-inflicted.
Per those filings, the site’s management failed to segregate player funds for its 30,900 accounts – the same act of negligence that sparked the infamous failure of Full Tilt Poker. By player funds to be freely spent on operating expenses, Fantasy Aces’ management burned through $1.3 million of its players’ money.
The financial malfeasance was documented in the court filings as occurring thusly:
“Although Debtor was supposed to keep the amounts in the Players’ ‘accounts’ in trust and separate from Debtor’s operating funds, it did not do so and all Player funds were used by Debtor to pay operating expenses.”
Other revelations from the bankruptcy filings include the high level of stratification within DFS player bases. Of the 30,900 player accounts on Fantasy Aces when the site shuttered, only 14 are owed more than $10,000, while the highest amount of debt owed to a single player is $91,000.