Delaware North, the owner and operator of two West Virginia sportsbooks, is suing its former partner and betting provider, Miomni Gaming.
The two sides made history when bringing the first online sportsbook to the Mountain State just a few months ago.
Now things have turned from bad to worse for the WV sports betting market.
The lawsuit claims Miomni and its CEO, Michael Venner lied to Delaware North.
According to a press release from Delaware North, the lawsuit states:
“Miomni Gaming and its chief executive officer fraudulently misrepresented its ownership of a key part of the BetLucky sports-wagering platform and breached the companies’ joint-venture contract.”
Initially, Delaware North just suspended its three sportsbooks with hopes that this issue could be resolved. Since then, the company has terminated its agreement with Miomni and now it has grown into a lawsuit.
Since the suspension occurred on March 6, WV residents have been without an online betting option altogether. Total handle and revenue have started a steady decline without one available.
What remains for WV bettors are three retail sportsbook options across the state:
Delaware North wants out
The problem started because Delaware North thought it was receiving a full sports betting solution from Miomni, without the assistance of any third party.
It was when the sportsbooks closed for the second time that Delaware North discovered there was in fact a third-party vendor operating its sportsbooks.
These documents showed that Miomni wasn’t capable of providing a full sports betting operation by themselves.
The lawsuit reads:
“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.”
WV sportsbooks abruptly close
Miomni couldn’t handle producing the sports betting platform itself. Delaware North knew there was someone else involved. That company was Cypress-based Entergaming.
The root of Entergaming and Miomni’s issue was based on Miomni’s belief that it had acquired through purchase all of the necessary software and code to run the sportsbook.
This grew into a real problem for everyone involved because this deal never finalized and Entergaming was still acting as the third-party vendor without Delaware North’s knowledge or approval.
The lawsuit says:
“The BetLucky License Agreement required Miomni to seek prior approval before retaining any third parties to perform services in connection with the Platform. The BetLucky License Agreement also required Miomni to identify all third-party products or materials that were included in, or required to operate, the Platform.”
To make the situation even worse, when Delaware North started digging for answers, Miomni gave several odd excuses.
Miomni finally opened up about Entergaming. It also said that Entergaming caused the failures on purpose with the intent of “extorting” Miomni.
WV sportsbooks go down
The lawsuit also alleges that Miomni withheld information from Delaware North about their situation with the third-party vendor.
Delaware North claimed that they did not get notice of the Feb. 25 letter from Entergaming to Miomni ending their agreement until March 12.
This was six days after the three WV sportsbooks closed.
“Miomni instead misrepresented the cause of the March 6, 2019 Platform outage to DNG. Entergaming’s disabling of the Platform was not the result of any “criminal” behavior or “hacking,” and Miomni knew that all along.”
Delaware North believes that Miomni never paid any portion of its option agreement to Entergaming. Entergaming then responded by shutting down its services.
WV sports betting moves on
Regardless of the outcome, this is a terrible look for the state and for legal sports betting.
This may put a dark cloud around Delaware North and Miomni. The true losers, however, are the residents of WV.
With only three land-based sportsbooks available, it is a daunting task to place a sports wager if you don’t live within range of these casinos.
Unfortunately, it doesn’t appear that the end is coming anytime soon.
Despite there being interest from several other potential online sportsbook suitors (DraftKings Sportsbook, FanDuel Sportsbook, and William Hill Sportsbook), it will probably take some time for them to become regulated in WV.
WV Lottery Director John Myers mentioned previously that the state will see how the Department of Justice rules on the new Wire Act opinion before moving forward with more online options.
This is an awful scenario for WV sports bettors who only got a brief taste of mobile sports betting. Hopefully, for everyone’s sake, the judicial system can work some magic and get WV mobile betting back sooner rather than later.