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  • rtraversa

    Update from MGT regarding FanThrowdown

    To our players and the broader DFS Community:

    In the last day or so we have received feedback about FanThrowdown’s policy regarding the issuance of 1099-MISC tax documents for calendar year 2013. We became aware that due to the lack of communication (and miscommunications) in this process, the DFS community concluded that FanTD was not sensitive to this issue. I can assure you that this perception could not be further from the truth. For those of you who do not know me, I am the CFO and a director of MGT Capital Investments, Inc., the parent company of FanTD. As you can appreciate, in my position, I need to obtain all relevant facts prior to jumping to uncertain conclusions, particularly with respect to such sensitive information as FanTD’s tax reporting obligations to our players.

    I requested our tax advisors conduct deeper research, and based on those findings plus the Company’s independent research, we will report 1099-MISC tax documents utilizing “Net Winnings” which will consist of Gross Winnings less Entry Fees. We express our sincerest apologies for any concerns or misunderstanding by not providing certainty on this matter sooner.

    Several months ago, when MGT invested into FanThrowdown, we saw an asset with great potential for growth in an exciting new industry. Our initial goal was to repair the longstanding technical issues by attracting exceptional engineering talent and then to deploy daily contests with greater accessibility and speed. We now face the need to strengthen the management team at FanThrowdown and we will be making immediate changes to address the situation.

    With respect to player deposits, please be assured that MGT is a New York Stock Exchange company with a $25 million market value, $5 million in cash, and no debt. There is absolutely no need for concern with respect to the safety and integrity of your funds.

    Thank you again for your feedback—we believe we have always demonstrated immense respect for our players and will continue to do so.

    It remains our goal to aggressively improve MGT’s Daily Fantasy Sports ventures with our player’s best interests in mind.

    Best regards,

    Robert Traversa
    MGT Capital Investments, Inc.
    500 Mamaroneck Avenue, suite 204
    Harrison, NY 10528

  • mikethebeast

    “We now face the need to strengthen the management team at FanThrowdown and we will be making immediate changes to address the situation.”

    If you get rid of Jonathan (I don’t know if that’s possible since he is one of the founders) I will redeposit and play again. I just can not morally give any of my hard earned money to a sexual offender.

    Good luck and I look forward to playing on FTD again.

    edit. changed predator to offender

  • deactivated17417

    Thank you for your candor…

    Another issue, possibly bigger issue, is that the FTD website was brought down for maintenance yesterday and during this time the Terms of Service were allegedly altered. This was very unfortunate and has caused an issue of trust with Fanthrowdown.

    To my knowledge, no one from FTD has yet acknowledged this has even happened or explained why it was done.

  • jenbenners

    so what does this mean regarding tax forms and held withdrawals? do we wait for another email?

  • deleted1017

    @TheCoz said…

    Thank you for your candor…

    Another issue, possibly bigger issue, is that the FTD website was brought down for maintenance yesterday and during this time the Terms of Service were allegedly altered. This was very unfortunate and has caused an issue of trust with Fanthrowdown.

    To my knowledge, no one from FTD has yet acknowledged this has even happened or explained why it was done.

    Yep, and that’s my biggest concern. How do I know that won’t happen again? Why won’t anyone take any responsibility for that?

  • bobbyrogers46

    Here is something I found interesting in reading into the SEC filing of MGT buying out FTD:

    The execution of the Securities Purchase Agreement had been disclosed in an 8-K dated April 26, 2013. The Company purchased the interests from Michael Mosiello, Jonathan Licata, George Licata, Christopher Hutter, Prostar Enterprises, Inc., Louis Venturino, Brian Mosiello, Kenneth Hutter, Nicholas Costa, Frank Mongero, Jr. and E&R Polishing Corp.
    (collectively, the “Sellers”). The Company had no pre-existing relationship with any of the Sellers, except that Louis Venturino is the brother-in-law of Robert Traversa, the Company’s Treasurer and Chief Financial Officer. By virtue of his ownership of interests of FanTD, LLC, Mr. Venturino received his pro forma portion of the Purchase Price.

    The Company (MGT) had no pre-existing relationship with any of the Sellers(FTD), except that Louis Venturino (seller) is the brother-in-law of Robert Traversa (CEO of MGT), the Company’s Treasurer and Chief Financial Officer. In other words, all of these guys are pretty close in personal relationships.

  • EmpireMaker2

    @rtraversa said…

    Update from MGT regarding FanThrowdown

    To our players and the broader DFS Community:

    In the last day or so we have received feedback about FanThrowdown’s policy regarding the issuance of 1099-MISC tax documents for calendar year 2013. We became aware that due to the lack of communication (and miscommunications) in this process, the DFS community concluded that FanTD was not sensitive to this issue. I can assure you that this perception could not be further from the truth. For those of you who do not know me, I am the CFO and a director of MGT Capital Investments, Inc., the parent company of FanTD. As you can appreciate, in my position, I need to obtain all relevant facts prior to jumping to uncertain conclusions, particularly with respect to such sensitive information as FanTD’s tax reporting obligations to our players.

    I requested our tax advisors conduct deeper research, and based on those findings plus the Company’s independent research, we will report 1099-MISC tax documents utilizing “Net Winnings” which will consist of Gross Winnings less Entry Fees. We express our sincerest apologies for any concerns or misunderstanding by not providing certainty on this matter sooner.

    Several months ago, when MGT invested into FanThrowdown, we saw an asset with great potential for growth in an exciting new industry. Our initial goal was to repair the longstanding technical issues by attracting exceptional engineering talent and then to deploy daily contests with greater accessibility and speed. We now face the need to strengthen the management team at FanThrowdown and we will be making immediate changes to address the situation.

    With respect to player deposits, please be assured that MGT is a New York Stock Exchange company with a $25 million market value, $5 million in cash, and no debt. There is absolutely no need for concern with respect to the safety and integrity of your funds.

    Thank you again for your feedback—we believe we have always demonstrated immense respect for our players and will continue to do so.

    It remains our goal to aggressively improve MGT’s Daily Fantasy Sports ventures with our player’s best interests in mind.

    Best regards,

    Robert Traversa
    MGT Capital Investments, Inc.
    500 Mamaroneck Avenue, suite 204
    Harrison, NY 10528

    Do you mind showing evidence of an escrow account with players funds? Should take all of one minute to do.

  • jenbenners

    answered my own question:

    Bob-FanTD: Hey benj.
    Bob-FanTD: What can I do for ya tonight?
    →will we receive another email regarding tax info?
    Bob-FanTD: I’m sure eventually, but they have released a statement that is linked ot our lobby.
    Bob-FanTD: https://fanthrowdown.com/article/view/mgt-update
    Bob-FanTD: I don’t have exact detalis of the entire policy, but I cna definaely say that we are only going to report net winnings and not gross.
    →i read that, but i was wondering what happens to my pending withdrawal. I am pretty sure I don’t fall into the “needs to submit info” category” and have yet to sign/send in my form.
    Bob-FanTD: Let me take a look.
    Bob-FanTD: Yeah, I see you as having a pending withdrawal and not needing to submit a form.
    →cool, can you release that for me then.
    Bob-FanTD: I would expect that to get paid out shortly. The withdrawal team is extremely backed up, but they expcet to have quite a few processed in the next 24 hours.
    →i would imagine
    Bob-FanTD: You may well have yours tonight. I cant promise anything, but I know they are working on them non-stop.
    Bob-FanTD: They are doing them in the order they came in for the most part, and I see that yours is towards the top of the list.
    →thank you.
    Bob-FanTD: No problem. I apologize for the delay and all the confusion.
    Bob-FanTD: We obviously jave no control over it on the FanTD side, but it doesnt mean we like to se it happen to reg players like yourself either.
    →it’s all good, probably not your fault personally.
    Bob-FanTD: Again, I wouldn’t be surprised if yours gets processed tonight. Just let me know if there is anything else you need or questions that you have.
    →will do

  • sixbits

    “We now face the need to strengthen the management team at FanThrowdown and we will be making immediate changes to address the situation.”

    Brit should be your first piece in putting this puzzle back together.

  • jross2021

    do you even know the details? I know it was less than 16, and that’s despicable. But isn’t Akon a sexual offender because he hooked up with a girl in a 21+ club who was under age?

    If you like the site, play on it.

  • FBO

    so next year will it be the same ? or is it going to be total winning as it says in the new tos?

  • rotokevin

    2014 RG Bowling Co-Champion, CPA & DFS Tax Guru

    • 2014 FanDuel WFBC Finalist

    @FBO said…

    so next year will it be the same ? or is it going to be total winning as it says in the new tos?

    This is a great question.

  • joonbae

    • Blogger of the Month

    Does this guy from FTD think RG is some electronic billboard where he can control the message as part of some crisis communication tool? Or, is he going to respond to the views & questions he elicited and solicited by opening this thread (from his self proclaimed valued customers)? Assuming that he wrote the thread for transparency and not just message/perception control (since he did say players have “absolutely” nothing to worry about … ‘absolutely’ is an odd choice of words by any lawyer or CFO btw). In my mind, this fellow just raised suspicions exponentially, not lowered it.

  • BobFTD

    FanThrowDown Rep

    @FBO said…

    so next year will it be the same ? or is it going to be total winning as it says in the new tos?

    For 2013 and moving forward FanThrowdown will be using the following method to calculate net winnings

    (Gross Winnings – Buy Ins)

    We have updated our terms of service on the site to reflect these changes.

    If anyone has questions regarding their winnings on FanThrowdown, please send us an email to support@fanthrowdown.com

  • FBO

    why dont you include losses like other sites ?

  • WhiskeyTavon4

    • 578

      RG Overall Ranking

    • x2

      2014 DraftKings FBWC Finalist

    • 2017 DraftKings FBWC Finalist

    What does gross winnings minus buy in means. Can stl cards or rotokevin comment on what exactly that means and how it compares to the other sites.

  • TwoGun

    • 174

      RG Overall Ranking

    • x3

      $1M Prize Winner

    • x3

      2016 DraftKings FFWC Finalist

    @FBO said…

    why dont you include losses like other sites ?

    That does include losses essentially and is similar to what other sites do. Let’s say you buy-in to one for $50 and one for $100. You blank in the $50 and get $200 in the $100. Your amount would be $50 (200-150), which is the same as saying you won 100 and then lost 50.

  • WhiskeyTavon4

    • 578

      RG Overall Ranking

    • x2

      2014 DraftKings FBWC Finalist

    • 2017 DraftKings FBWC Finalist

    If I am understand this correctly and it is gross winnings minus buy in and losses arent included. How could anyone possibly play there and how does it effect people who won a lot of money in 2013 and withdrew in 2014.

  • WhiskeyTavon4

    • 578

      RG Overall Ranking

    • x2

      2014 DraftKings FBWC Finalist

    • 2017 DraftKings FBWC Finalist

    @TwoGun said…

    That does include losses essentially and is similar to what other sites do. Let’s say you buy-in to one for $50 and one for $100. You blank in the $50 and get $200 in the $100. Your amount would be $50 (200-150), which is the same as saying you won 100 and then lost 50.

    In your example though wouldnt your gross winnings be $250.

  • TwoGun

    • 174

      RG Overall Ranking

    • x3

      $1M Prize Winner

    • x3

      2016 DraftKings FFWC Finalist

    @WhiskeyTavon4 said…

    In your example though wouldnt your gross winnings be $250.

    Your gross winnings are $200. You won $200 in the $100 and got nothing in the $50.

    So the 1099 method that spooked everyone would send a 1099 for $200. However, the method they are using now and most sites use would be for $50.

  • rotokevin

    2014 RG Bowling Co-Champion, CPA & DFS Tax Guru

    • 2014 FanDuel WFBC Finalist

    @WhiskeyTavon4 said…

    What does gross winnings minus buy in means. Can stl cards or rotokevin comment on what exactly that means and how it compares to the other sites.

    Identical to FanDuel, DK and most of the industry. Total prizes won minus all entry fees paid = net earnings.

  • Cal

    RG CoFounder & Admin

    • 585

      RG Overall Ranking

    • $1M Prize Winner

    • x4

      2015 DraftKings FFWC Finalist

    Here’s the link to Jonathan Licata’s resignation thread. Discussion of his background is officially locked down for this point forward.

    /threads/FanThrowdown_Resignation-222016

  • WhiskeyTavon4

    • 578

      RG Overall Ranking

    • x2

      2014 DraftKings FBWC Finalist

    • 2017 DraftKings FBWC Finalist

    Thanks for the info on these various issues RG staff. I have made the decision to continue to play at FTD. They are processing payouts in a timely manner, they offer a nice rakeback program and seem like they are committed to fixing the problems that they created. I hope that people will give them one more chance like I am because they do have some nice game offerings.

  • FBO

    Brit-FanTD: It looks as if you should be paid out tomorrow, withdrawls typically take 24-48 hours to be proccesed, however we have a slight backlog right now

    Played for the first time on there and cashed out almost 400 so much for the fast payout lol does it really take 3 days to send money to your paypal

  • stlcardinals84

    Leading RG Analyst

    • 2018 DraftKings FBWC Finalist

    • 2018 DraftKings FBBWC Finalist

    I’m not trying to stir the pot but I requested my withdrawal the afternoon of 1/9 and I have not been paid yet.

    I also had a net loss there so it’s not as though they are waiting on tax forms from me.

  • BobFTD

    FanThrowDown Rep

    @stlcardinals84 said…

    I’m not trying to stir the pot but I requested my withdrawal the afternoon of 1/9 and I have not been paid yet.

    I also had a net loss there so it’s not as though they are waiting on tax forms from me.

    Every Pending withdrawal will be paid today, and your withdrawal has just been processed STL.

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