Another daily fantasy sports (DFS) site. FantasyHub.com, has ceased operations in the first month of 2016, leaving all their players without any access to their winnings.
FantasyHub.com is a small DFS platform that offers players the opportunity to win cash or other goods and experiences sponsored by the many pro-athletes who run games on the site, while supporting various great causes. On average, 5% of each game’s winnings go to support charities of the winners’ choice. Over the course of its operation, FatasyHub has partnered with 30 professional athletes including; 100% of net profits from sponsored games go to charities of the athletes’ choice, they also contribute to the prize pool with their time and personal possessions. The site claimed to have raised more than $200,000 for various charities through their contests.
An ugly ending?
FantasyHub players had been complaining for a few days about not being able to withdraw funds from their accounts; they also mentioned that they were not able to reach anybody to answer their question either. Following this, the ‘fantasy sports for charity’ announced on Friday that their services will be temporarily suspended by emailing their players and posting it on their site.
The emails states that FantasyHub was unable to reveal more details regarding the situation, in accordance with advice from their counsel; they were finalising discussions with a with a strategic third party regarding the company and once tg=hay have all the information, it will be passed on to their customers. However, attempts to contact the company remained fruitless.
Not the first one
Consumer protection standards of the DFS industry has seen much scrutiny in the recent months and FantasyHub turned out to be the second DFS site to close, following FantasyUp.com; who were unable to pay their players their winnings.
FantasyUp was acquired by iTEAM Network, another fantasy operator; they took over all player balances and ensured funds would be available to pay their customer. Gabe Hunterton, the CEO of iTEAM Network stated that unless there is complete transparency on how customer funds are being handled, nothing can prevent instances like these from repeating themselves. He also added that it is not difficult to manage the funds if they are kept separate and verified by an independent firm; providing customer with security in knowing that money for winnings have been put aside.
No separated funds?
FantasyHub is a member of the Fantasy Sports Trade Association (FSTA), which requires members to keep player funds segregated from business operations funds. Paul Charchian, president of FTSA said that they continually emphasise the importance of keeping player money safe and that it is never acceptable to spend prize money. He also stated that FTSA supports bills and legislation that require third party auditing and all the legislations they are proposing also have provisions for regulating and auditing DFS companies to ensure that prize obligations are not mixed with other company funds.
Several FantasyHub players told ESPN that they had not been able to access their funds for over a week; many have thousands of dollars of balance on FantasyHub accounts and are worried they will never see any of the money. However, FTSA is cautiously optimistic that FantasyHub will soon find a backer to help them meet their prize obligations.[sc:draftkings]