According to the annual report of FanDuel, one of the market leaders among daily fantasy sports providers and the opinion of a respected independent auditor, negative developments in the regulatory environment in the United States could result in the provider being endangered.
Valued at over £1 Billion, privately-held FanDuel has warned that the situation in the United States, which is its primary market, could seriously impact its future operations.
The report also confirmed that FanDuel has suspended its operations in Texas, Nevada as well as New York until such time that it receives further legal clarity on the situation and that there are several class action lawsuits pending against the provider with regard to its activities.
FanDuel has also been warned by its auditor, Deloitte, that there is a possibility that there could be further negative legality rulings by US states.
According to Nigel Eccles, FanDuel’s Chief Executive Officer, FanDuel management has always been of the view that the company’s activities in Canada and the US are within the law and that although the company will “robustly” defend its position, there are several possible outcomes that are beyond its control.
The turmoil and uncertainty has, however, created a threat of investor fund raising difficulties.
The absence of legal clarity in the States regarding payment options currently affects the willingness of several credit card and online payment companies to process payments to the business.
The fact that over twenty states in the US have drafted legislation to declare fantasy sports legal has, however, left Eccles remaining optimistic.
