The fall of daily fantasy industry continued Friday, as a small company called FantasyHub.com suspended operation, leaving some players unable to access their funds.
“Due to advice from counsel, we cannot divulge many details but we have been in discussions with a strategic third party regarding the company and are now finalizing those discussions,” the email, reviewed by ESPN, reads, “While we can’t say more at this time, we’ll be in touch very soon with full information.”
The announcement followed days of grumblings from FantasyHub players, who said their withdrawal requests had not been processed and they were unable to reach anyone at the site.
FantasyHub billed itself as “fantasy sports for charity” for charity and, according to ESPN, claimed to have raised $200,000 for charity. But according to ESPN gambling reporter David Payne Purdum, that claim is somewhat dubious.
DFS site claimed to raise over $200K for charity. Problem: Multiple charities say they've never received a donation from FantasyHub. Awful.
— David Payne Purdum (@DavidPurdum) February 19, 2016
Between disputed charitable contributions and unresolved debts to players, FantasyHub sounds pretty sketchy, and this situation certainly doesn’t help the declining reputation of daily fantasy sports, which has taken many blows over the past few months. Several states have declared daily fantasy a form of gambling and therefore illegal, and Major League Baseball recently threatened to withdraw from a partnership with DraftKings, which also lost its exclusive advertising relationship with ESPN.
FantasyHub is the second notable daily fantasy operation to close in recent weeks, following FantasyUp.
After ceasing operations and notifying players their balances would not be paid, FantasyUp was acquired by fantasy operator iTEAM Network, which took over player balances and ensured funds would be available.
Gabe Hunterton the CEO of iTEAM Network added: “To keep instances like FantasyUp and Fantasy Hub from occurring over and over again, the industry must require complete transparency on handling of customer funds. It’s not difficult. You keep the customer money segregated. Then you have an independent firm verify that you’ve done so. Period. The migration of customers to the new FantasyUp.com has gone extremely well. The customers now know that their funds are secured by the responsible financial practices of iTEAM Network.”
If the daily fantasy industry is to survive and thrive, it will certainly require the type of regulation that prevents companies like FantasyHub from abusing players and partners.
[photo: Build In Austin]