Delaware North Sues Over WV Sports Betting Fiasco Claiming Fraud
The news coming from the Delaware North-Miomni entanglement continued last Thursday. The operator of the Mardi Gras Sportsbook and Wheeling Island Sportsbook casinos officially sued its former sports betting partner.
The two companies partnered on the BetLucky Sportsbook and with the two properties to launch sports betting in West Virginia. Those were shut down in early March after an intellectual property dispute between Miomni and European software company Entergaming.
The lawsuit alleges:
“Miomni Gaming and its chief executive officer fraudulently misrepresented its ownership of a key part of the BetLucky sportswagering platform and breached the companies’ joint-venture contract.”
That essential piece of software was critical in keeping the app functional and led to the shutdown.
A look at the WV sports betting lawsuit
The lawsuit alleges Miomni’s CEO Michael P. Venner fraudulently induced Delaware North into a partnership. That includes not disclosing that Entergaming owned intellectual property critical to the venture.
“During negotiations for the joint venture, Miomni and Venner repeatedly represented to DNG that Miomni owned the intellectual property rights in the platform, including the source code underlying the ‘front-end interface’ and the ‘back-end’ of the platform.
“DNG relied on those representations when it decided to contract with Miomni. In the (joint-venture agreement), Miomni represented that it owned and controlled the platform and that Miomni’s performance would not be impaired by any third-party contracts.”
Delaware North argues that those misrepresentations led to the closure of the sports betting app and live books.
The suit alleges the shutdown caused Delaware North a loss of reputation and customers.
The lawsuit seeks to release Delaware North from any contractual agreements with Miomni. It doesn’t mention the damages the company is seeking, but Delaware North contributed $5 million in cash capital to the operation.
WV sports bettings fraud allegations
Beyond its disagreement with Delaware North (DNG), the lawsuit alleges Miomni misled gaming regulators.
“Miomni not only defrauded DNG, it also concealed material information from regulators. In its application to the West Virginia Lottery for a managed provider license, Miomni failed to disclose that Entergaming held rights in, exercised control over, and continued to provide necessary services with respect to the Platform.”
The suit also alleges Miomni misled Delaware North as to the reasons behind the shutdown. Its initial efforts concealed the disagreement with Entergaming as the cause.
Delaware North instead says the company blamed external criminal forces for the initial shutdown. The company only later admitted to Entergaming’s pivotal role in the operation.
“Miomni instead misrepresented the cause of the March 6, 2019 Platform outage to DNG,” the suit notes. “Entergaming’s disabling of the Platform was not the result of any ‘criminal’ behavior or ‘hacking,’ and Miomni knew that all along.”
Miomni’s non-response
With the news dropping late in the week, Miomni had not yet offered a response to the suit. The suit certainly doesn’t paint the company in a good light.
The press release section of the Miomni website didn’t offer any details on its side of this story. The company didn’t respond to its Twitter feed, which hasn’t been updated since November of 2016.
play-wv.com reached out to the company and will update this story when the company offers a response.
Miomni has considerable experience working with casino companies and building their digital offerings. Their gaming partners include:
- Boyd Gaming
- Caesars Entertainment
- Station Casinos
Miomni’s products often rely on third-party services to complete its digital offerings. Delaware North alleges it was not made aware that the company doesn’t offer an end-to-end sports betting capability in-house.
Impact of the WV sports betting shutdown
Since the closing of the legal sports betting app and two West Virginia sportsbooks, the Mountain State has seen a major negative impact on handle. As a rural state, many players can’t get to the three remaining live sportsbooks.
The shutdown has angered and frustrated many gamblers in the state. DraftKings Sportsbook has announced plans to enter the market but is awaiting regulatory approval.
When Miomni and Entergaming couldn’t resolve their dispute, Entergaming was able to disable the platform.
A timeline of events
Here’s a timeline of events in the case:
Feb. 5 – Service is interrupted but eventually restored.
March 6 – The betting app goes down again and isn’t restored. According to the suit, Miomni representative said they didn’t know the reason for the outing.
Delaware North now disputes that fact and believes the company wasn’t forthcoming about the association with Entergaming.
March 19 – Delaware North President E. Brian Hansberry pens a letter to the West Virginia Lottery detailing issues with the shutdown. The letter includes more information about the service interruption and seeks to offer an explanation to bettors.
“Given the allegations of Miomni and Entergaming, the continued service interruption to the citizens of West Virginia, and our firm commitment to integrity and excellence, we are evaluating our options,” the letter notes. “We expect to be able to report on our next steps in the near future.
“This matter has already caused substantial disruption to our West Virginia patrons, as well as to employees of DNGE, who are West Virginia citizens. It has also harmed DNGE’s business and operations (including lost business due to the shutdown of the Platform, resulting in less tax revenue), and caused reputational loss.”
April 1 – The company releases a statement that is severing ties with Miomni.
“We have notified the West Virginia Lottery Commission that Delaware North is taking steps to terminate its partnership with Miomni Gaming, our management services provider in West Virginia,” the letter notes.
“Since March 6, Miomni’s contract dispute with third-party technology supplier Entergaming has resulted in our inability to accept new sports wagers at our Wheeling Island and Mardi Gras casino sports-betting operations as well as via the BetLucky.com mobile app.”
April 18 – Delaware North officially files its lawsuit against Miomni. DNG filed the suit in the Delaware Court of Chancery, which hears disputes between companies.
What’s ahead for the closed WV sportsbooks?
Certainly, more is ahead in this sports betting mess as the two sides battle it out. A quick resolution is unlikely.
Delaware North is on the hunt for a new sports betting partner for its WV casinos. Unfortunately, that is likely to take some time, too.
With the WV Lottery proceeding cautiously in the launch of any new mobile sportsbooks, it may be a while before the Mountain State can bet online. For now, though, that leaves just three West Virginia casinos operating sportsbooks:
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