New York asks DFS operators proof of funds
The state gaming commission asked them to prove that they segregate player funds from operating capital.
US.- The New York State Gaming Commission asked daily fantasy sports (DFS) operators to prove that they segregate the funds that come from players from the ones that they use to operate their services.
According to Legal Sports Report, all licensed operators from New York received an email: “Racing, Pari-Mutuel Wagering and Breeding Law Section 1404(1)(l) requires a temporarily permitted interactive fantasy sports operator “ensure authorized players’ funds are protected upon deposit and segregated from the operating funds of such operator or registrant and otherwise protected from corporate insolvency, financial risk, or criminal or civil actions against such operator or registrant.”
In the email, the gaming commissions demands documentation so they can verify the legal mechanism and internal controls associated with such a segregated account by which player funds are protected from corporate insolvency, financial risk, or criminal or civil actions against such operator or registrant. “Accordingly, please include any documentation with banks or other depository institutions that establishes the restricted purposes of any accounts established for players’ funds and prize funds and the identity of all those authorized to transfer funds out of such accounts,” it also added.
The news come after DFS company Fantasy Aces filed for bankruptcy last week, whilst also owing its players more than US$1.3 million. It was expected for the company to merge with rival FantasyDraft, but the latter later backed out stating identified issued during their due diligence.
