Daily Fantasy Sports operators in New York were asked by the State Gaming Commission (NYSGC) to provide evidence of segregation of player funds from the funds they use to operate their businesses. The requests came on Friday, when the NYSGC sent e-mails to all approved DFS operators in the state, asking them to provide the Commission with paperwork that clearly shows their players’ money are segregated from the rest of the company’s funds, as to ensure the NYSGC that the money stay protected from company-related risks.

Namely, according to Legal Sports Report, in their correspondence the Commission requested documents that clearly outline the “legal mechanism and internal controls” that are used to ensure that player’s capital remains safe from any financial risks, insolvency, or criminal actions that might affect the company.

The action comes nearly a week after another NY-approved DFS operator Fantasy Aces filed for bankruptcy, leaving behind over $1.3 million in debt to players, which is likely the reason why the NYSGC is looking to verify that the remaining DFS operators don’t follow the same route.  Fantasy Aces, just like Draft Kings and FanDuel, was one of the five DFS operators approved by the state of New York. According to reports surrounding the bankruptcy procedure, Fantasy Aces were using player funds to run their company, despite claiming to do otherwise, leaving a massive debt to players in the wake of their fallout.

The state of New York has had several clashes with the DFS industry, the most prominent of which was when the Attorney General, Eric Schneidermen, won a legal battle that stopped operators from offering paid contests in New York.  But several months later, in August 2016, their operations were restarted when Governor Andrew Cuomo signed a new legislative that also authorized the Gaming Commission to oversee and regulate DFS operators.