Small DFS site FantasyUp has sent a notice to players that they are shutting down on Thursday and do not have the means to pay players. In their statement, FantasyUp cited liquidity issues as well as fallout from recent legal pressure with the industry.
Players have reporting over the last year that FantasyUp payments were not being paid in a timely manner. Many of those initial withdrawals were eventually processed; however, new payments have not been processed since November of 2015 according to the Rotogrinders thread. FantasyUp continued to take deposits from players during the issues.
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“The owners and investors in FantasyUp continued to fund the business while waiting for the financing deal, but after numerous conversations with advisors, experts, and past/potential investors, the Members of the LLC have concluded that they have no choice but to shut down the business and dissolve,” FantasyUp said in their email.
Although FantasyUp was a very small DFS site, they still had a following with some players who gravitated to the site for its rake-free contests, generous promotions. Unlike many DFS sites, FantasyUp accepted players from countries outside of North America such as Australia and New Zealand. FantasyUp was one of the few sites that also apparently accepted play from states were play is generally restricted, such as Arizona.
Some players are now threatening legal action. Some suggestions for course of action can be found in this Reddit thread.
Issue (again) Puts Spotlight on Need for Regulation
By now everyone in the DFS industry is familiar with the DraftKings data leak controversy and the fallout of the last few months (legal pressures, drop in player traffic).
FantasyUp’s troubles is another real world example that regulation is greatly needed in the daily fantasy sports industry. Thankfully FantasyUp closing is not the norm in the industry. But the situation undoubtedly gives the industry a blackeye, providing the potential to drive away players from reputable sites, a classic guilt by association and a primary reason why so many in the industry want to be regulated.
Player fund protections are one of the most important components of regulation proposals such as the one drafted by Massachusetts. Such requirements mandate that player funds are kept separate from operational funds so if a company such as FantasyUp does fall on hard times only the company faces the ramifications and not the customer.
Full FantasyUp Email to Players
For the past few years, FantasyUp has been providing daily fantasy sports (DFS) contests with industry leading promotions. The Company essentially paid players to play on its platform with the expectation that industry would continue to expand and a financing deal would allow for us to further our growth within the industry.
Such a deal presented itself to FantasyUp months ago, before being delayed for investor personal issues. Over the following weeks, the industry saw numerous legal issues arise, increasing the cost of doing business and the decreasing the ability to raise funds.
FantasyUp no longer has the capital to fund even minimal operations. The owners and investors in FantasyUp continued to fund the business while waiting for the financing deal, but after numerous conversations with advisors, experts, and past/potential investors, the Members of the LLC have concluded that they have no choice but to shut down the business and dissolve.
As of January 14th, 2016, the Company has ceased operations and legally dissolved the business. Our sincere apologies that we cannot process withdrawals, as the Company does not have the funds needed to process the withdrawals to all customers.
It was our privilege to serve you for the past few years.