Daily fantasy sports operator DraftKings has ridden to the rescue of players left high and dry by the recent shutdown of FantasyHub.
On Thursday, ESPN’s David Purdum reported that DraftKings had agreed to cover the outstanding FantasyHub player balances, which Purdum claimed amounted to “a few hundred thousand dollars.” DraftKings has also agreed to honor the over $100k that FantasyHub had pledged to charities via a portion of its DFS proceeds.
The Austin, Texas-based FantasyHub abruptly went dark in mid-February, pleading for patience while it conducted “discussions with a strategic third party” regarding the site’s future. Nothing had been heard from the company since that announcement, nor from the Fantasy Sports Trade Association (FSTA), of which FantasyHub was a member.
Starting Thursday night, FantasyHub players can log on to DraftKings, where they’ll find a page that allows them to either migrate their balance to an existing DraftKings account or create a new one. Either way, players will have the option of immediately withdrawing their cash with no playtrhough requirement.
DraftKings co-founder Matt Kalish stressed that the bailout was “not an acquisition deal or an asset purchase deal” and no FantasyHub staff would be joining DraftKings. Kalish claimed it was simply an effort to “do the right thing” for FantasyHub players, with which DraftKings has “a nearly 80% overlap.”
Kalish called FantasyHub’s apparent abandonment of its players “reprehensible” and a “breach of trust.” DraftKings “had the ability to step up and do something” so Kalish said it wouldn’t be right for them to “sit on the sideline.”
FantasyHub players won’t care too much about DraftKings’ motives but CEO Jason Robins (pictured) clearly saw the publicity value in donning his white armor and spending a couple hundred grand to change the current negative narrative surrounding DraftKings and the entire DFS industry.
DraftKings, along with rival FanDuel, is one of the driving forces behind the FSTA, whose charter requires members to strictly segregate customer funds from operating capital, a requirement that should have prevented FantasyHub from finding itself in this predicament in the first place.
