Fantasy Hub Founder on Closure: Investors Started Fleeing
Fantasy Hub founder Steven Plappert finally broke his silence regarding the abrupt closure of his Louisville startup Daily Fantasy Sports company.
FantasyHub, he disclosed to Marty Finley of Louisville Business First, was on the verge of securing $1.1 million during a seed-capital round last year.
But one Austin, Texas-based investor pulled out of a $400,000 investment after being spooked by a series of legal actions and threats from various state Attorney Generals and Gambling Commissions this past NFL season.
Finley notes in his report that things got worse in January, when Texas Attorney General Ken Paxton declared that daily fantasy sports was a form of illegal gambling. Fantasy Hub had recently located to Texas from Louisville.
At that point, most prospective investors approached by FantasyHub had similar concerns about the uncertainty surrounding the fantasy sports industry and were unwilling to take the risk.
"Your growth is awesome, your team looks cool, I like the idea, but let's just wait until these legal questions get answered before we do anything," Plappert said was the general response from potential new investors. "My response was always, 'well, I would love to do that, but I don't have time.' "
Fantasy Hub customers dodged a bullet after DraftKings swallowed up the company and ensured all players owed money were paid out. Most were already playing at DraftKings, Plappert revealed.
Initially the company's silence brought ridicule and animosity from the jilted players.
Plappert and the other six staff at FantasyHub read the comments and understood the anger, hurt and confusion from players directed at FantasyHub's inaction, Finley writes.
"I totally understand why a lot of people said some of the things that they said," Plappert said.
- Aaron Goldstein, Gambling911.com
