Daily fantasy eSports operator Vulcun says it will stop accepting real-money fantasy wagers on eSports events, citing regulatory concerns in the United States.
In a notice posted to the site’s blog on Monday, Vulcun said it would “phase out paid fantasy” effective Jan. 14, 2016, which marks the start of the new season of the League of Legends Championship Series.
Vulcun is advising users to withdraw all cash from their accounts by Feb. 5, after which any remaining funds will be converted into ‘gold’, the site’s proprietary virtual wagering currency. All unused pending bonuses will expire on Feb. 6.
The company said it arrived at this decision “after careful consideration (and much heartache).” Vulcun says the “current legal landscape” in the US has made it “difficult” to fulfill its aim of making eSports more engaging and fun through fantasy wagering. Vulcun says it will now focus its efforts on things all its users can enjoy “rather than trying to figure this situation out state by state.”
Vulcun rationalized that the real-money phase-out was partially a reflection of user trends, which saw less than 10% of its users engage in paid fantasy play last month, while the other 90% “participated in everything else.”
Vulcun launched in January 2015 and quickly attracted both players and investors looking to cash in on the burgeoning eSports fantasy market. The two main daily fantasy sports operators, DraftKings and FanDuel, eventually dipped their toes into the eSports pool via FanDuel’s purchase of AlphaDraft and DraftKings’ launch of an in-house offering.
In October, Vulcun ceased its operations in Nevada after the state Gaming Control Board ruled that real-money daily fantasy sports operators required state gaming licenses. At the time, Vulcun CEO Ali Moiz told VentureBeat that it wasn’t clear whether the Board’s edict applied to fantasy eSports but the site had nonetheless decided to shut down “as a precaution.”
Since then, daily fantasy sports has been under sustained attack by various state attorneys general, most notably in New York, where AG Eric Schneiderman is seeking not only the end of DFS activity in New York but the refunding of all moneys lost by New York players on DraftKings and FanDuel.
In mid-December, Schneiderman convinced the state Supreme Court to impose an injunction against the DFS operators operating in New York, but the operators won a temporary stay of that order. Monday (Jan .4) marks the date by which a New York appellate court panel was to consider whether to lift the stay.
The parties were to present their respective cases to the appellate judges on Monday but a late change meant the parties would be filing their arguments by paperwork only. It’s unknown when the court will issue a decision on lifting the stay.