Delaware North Sues Over WV Sports Betting Fiasco Claiming Fraud

Last Thursday, the ongoing dispute between Delaware North and Miomni took a new turn. The company operating the Mardi Gras Sportsbook and Wheeling Island Sportsbook casinos filed a lawsuit against its former sports betting partner.

After forming a partnership, the two companies collaborated on the BetLucky Sportsbook in order to introduce sports betting in West Virginia. Unfortunately, in early March, both ventures had to be closed due to a disagreement over intellectual property between Miomni and Entergaming, a software company based in Europe.

The lawsuit alleges:

The ownership of a crucial component of the BetLucky sports wagering platform was deceitfully misrepresented by Miomni Gaming and its CEO, resulting in a breach of the joint-venture agreement between the companies.

The app’s functionality heavily relied on that crucial software component, which ultimately resulted in its shutdown.

A look at the WV sports betting lawsuit

The lawsuit claims that Miomni’s CEO, Michael P. Venner, deceitfully persuaded Delaware North to enter into a partnership without revealing that Entergaming possessed essential intellectual property for the venture.

Throughout the joint venture negotiations, Miomni and Venner consistently assured DNG that Miomni possessed the intellectual property rights to the platform, which encompassed the source code for both the ‘front-end interface’ and the ‘back-end’ components.

DNG made its decision to enter into a contract with Miomni based on the information and assurances provided by Miomni. According to the joint-venture agreement, Miomni confirmed that it possessed and managed the platform, and that its ability to perform would not be hindered by any agreements with third parties.

The closure of the sports betting app and live books was attributed by Delaware North to the misrepresentations made.

Delaware North claims that the shutdown resulted in a decline in both their reputation and customer base.

The lawsuit aims to free Delaware North from all contractual obligations with Miomni. Although the specific damages the company is pursuing are not mentioned, Delaware North had invested $5 million in cash capital towards the venture.

WV sports bettings fraud allegations

The lawsuit not only accuses Miomni of misleading gaming regulators but also highlights its disagreement with Delaware North (DNG).

Miomni engaged in fraudulent activities against DNG and additionally withheld crucial information from regulatory authorities. While applying for a managed provider license from the West Virginia Lottery, Miomni failed to reveal that Entergaming possessed rights in, exerted control over, and was still providing essential services related to the Platform.

The lawsuit claims that Miomni deceived Delaware North by withholding the true reason for the shutdown, instead attributing it to a disagreement with Entergaming.

Instead of taking responsibility, Delaware North initially shifted the blame to external criminal forces for the shutdown. However, the company eventually acknowledged the significant role played by Entergaming in the operation.

The lawsuit states that Miomni provided false information to DNG about the reason behind the March 6, 2019 Platform outage. Contrary to their claims of criminal behavior or hacking, the disabling of the Platform by Entergaming was not due to any such activities, and Miomni was well aware of this fact.

Miomni’s non-response

Miomni has not yet responded to the suit, which was announced late in the week. The suit undeniably casts the company in a negative light.

The press release section of the Miomni website failed to provide any information regarding its perspective on the matter. The company did not address any queries on its Twitter feed, which has remained untouched since November of 2016.

The company was contacted by play-wv.com and this story will be updated once the company provides a response.

Miomni possesses extensive expertise in collaborating with casino companies and developing their digital services. They have established gaming partnerships with the following:

• Boyd Gaming
• Caesars Entertainment
• Station Casinos

Delaware North claims that it was not informed about Miomni’s reliance on third-party services to provide a complete digital sports betting solution, as Miomni’s products heavily depend on these external services.

Impact of the WV sports betting shutdown

The Mountain State has experienced a significant decline in handle following the closure of the legal sports betting app and two West Virginia sportsbooks. Due to its rural nature, a large number of players are unable to access the three remaining live sportsbooks.

Many gamblers in the state are angered and frustrated by the shutdown, and DraftKings Sportsbook is eagerly awaiting regulatory approval before entering the market.

After failing to reach a resolution, Miomni found itself in a position where Entergaming successfully disabled their platform.

A timeline of events

Below is a chronological sequence of events in the case:

On February 5th, there was a brief interruption in service, however, it was eventually restored.

On March 6th, the betting app experiences another outage and remains unavailable. As per the lawsuit, a representative from Miomni stated that they were unaware of the cause behind the disruption.

Delaware North is currently challenging the claim and asserts that the company was not transparent regarding its connection to Entergaming.

On March 19, E. Brian Hansberry, the President of Delaware North, writes a letter to the West Virginia Lottery addressing concerns regarding the shutdown. The letter provides additional details about the disruption in service and aims to provide an explanation to the bettors.

The letter acknowledges the allegations made by Miomni and Entergaming, the ongoing service disruption in West Virginia, and our unwavering dedication to integrity and excellence. Currently, we are assessing our alternatives and anticipate providing an update on our course of action soon.

The situation has already caused significant disturbance to our customers in West Virginia, as well as to the employees of DNGE who reside in the state. Furthermore, it has adversely affected DNGE’s business and operations, leading to lost business opportunities due to the Platform’s shutdown and subsequently resulting in decreased tax revenue. Additionally, it has caused damage to DNGE’s reputation.

On April 1st, the company officially declares its decision to dissolve its association with Miomni through a released statement.

The letter states that Delaware North has informed the West Virginia Lottery Commission about their intention to terminate their partnership with Miomni Gaming, the management services provider in West Virginia.

As of March 6, our ability to accept new sports wagers at our Wheeling Island and Mardi Gras casino sports-betting operations, alongside the BetLucky.com mobile app, has been affected due to a contract dispute with third-party technology supplier Entergaming.

On April 18, Delaware North took the formal step of initiating legal action against Miomni by filing a lawsuit in the Delaware Court of Chancery, the designated forum for corporate disputes.

What’s ahead for the closed WV sportsbooks?

There is no doubt that the ongoing sports betting dispute will continue to escalate as the opposing factions struggle to reach a resolution. It is highly improbable that a speedy conclusion will be achieved.

Delaware North is currently searching for a new sports betting partner for its West Virginia casinos. Unfortunately, this process is expected to require a significant amount of time.

The WV Lottery is being careful in introducing new mobile sportsbooks, which means it might take some time before online betting becomes available in the Mountain State. Currently, only three West Virginia casinos offer sportsbooks.

• The Greenbrier presents FanDuel Sportsbook.
• Hollywood Casino at Charles Town Races hosts an exciting Sportsbook for all sports enthusiasts.
• Mountaineer Casino, Racetrack, and Resort offer an exceptional sportsbook experience.