Sports

Whether Phenoms Fantasy Football’s Refusal To Pay Out Is Fraudulent

Phenom Enterprises, LLC, a US-based company, had been long in the game for anyone to question their credentials. The payouts for Phenoms Fantasy Football were decent enough to attract hordes of players and the company gave players assurances that their winnings would be held in an escrow.

And then, as if out of nowhere, a letter from the commission of Phenoms Fantasy Football, Michael Zangrilli, changed everything. Phenoms declared that it would be unable to pay players more than 20-40% of their winnings.

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What Is Fantasy Football and How Does It Work?

Fantasy football lets you play as a virtual team manager using real teams and players from the NFL and other leagues. The idea is simple. You pick a team and sort players based on their stats and the likelihood that they’ll perform well in real life.

If your selected players do indeed perform excellently in real life, the stats of your virtual players will go up. And the opposite is also true. It all comes down to points which are awarded for touchdowns, yards gained, field goals, and so on.

You then enter your team in a virtual or fantasy league where it will compete against other teams, managed by other players. Based on the total stats and points, your team with either win or lose against the other team. And the rest works pretty much like regular competitive sports.

You play up the ladder, competing against other teams, hoping to win the finals. The results are declared after every week, and if you win, you can redeem prizes. You can either play for fun or real prizes, depending on which platform you choose.

You’ll essentially be gambling on how well your selected players will do in real life. And this will affect the outcome of the competitions you face in the virtual fantasy football league. If you win, you can claim juicy rewards and even multiply the entry fee by manifolds.

You can either claim rewards every week, if you win, or at the end of the season, depending on the policy of the platform you use.

What Happened to Phenom’s Fantasy Football?

Phenoms attracted a large number of fantasy football players because their payouts were higher. This meant that many players overstepped reputed names like CBS to play on Phenoms Fantasy Football. To do so, players had to submit an entry fee first.

You could enter the competition with several teams at a time for $50 apiece, and then, if you won, you’d be able to claim much more in winnings. The platform assured its players that all their winnings would be kept safe in escrow. But that’s not what happened.

On the 13th of December, 2014, Michael Zangrilli the commissioner of Phenoms Fantasy Football, sent out emails and posted the same letter on the company’s site. It said that Phenoms would be unable to meet its financial obligations to players.

At most, he said, they would be able to pay 20-40% of what they owed their users.

He explained too…

Almost a year earlier, Phenoms hired developers to develop their very own full fantasy league hosting platform. This would’ve eliminated any need for them to pay the likes of ESPN and Fantrax for draft handling, auctions, league management, and so on.

For this grand undertaking, Phenoms set aside $200,000, and expected final results before the start of 2014’s football season. But by December of the next year, the platform was nowhere near completion and had also gone over budget – it had cost them more than $630,000 by this time.

It didn’t help that Phenoms had pinned their entire hopes on the timely completion of their platform (and within budget). Failing to do so, they were unable to pay out the winnings that they owed. Michael ended the letter by accepting full responsibility and apologizing to the players who placed their trust in Phenoms.

Was the Phenom Enterprises LLC Engaged in Fraudulent Activities?

The reactions to this announcement were mixed – for one, it came out of the blue, so there was a shock. But players were torn between anger at the company’s actions and guilt over having trusted Phenoms even when there were other, more reliable options out there.

A few folks expressed sympathy too, stating that they felt that Michael was telling the truth.

Others only saw deceit…

Whatever the case, it is the bigger question that matters: did Phenoms commit fraud?

While the general opinion seems to be that the money is “stolen,” is it fraud? (fraudsters with PayID). Well, the answer is both yes and no. In a way, it is fraud because the players were owed money that was supposed to be in escrow, and now they’re not going to get it or get 20-40% in the best-case scenario.

But at the same time, it seems that a criminal level of mismanagement was more to blame for things, based on what we know so far. In either case, people lost money – fraud or poor sense of business, it makes little difference.

What Happens Next?

Since Phenoms is an LLC, there are no additional assets tied to the company. This means that the money is essentially gone. The company tried to secure external funding but failed. 

Following the Phenoms Fantasy Football debacle, many players sought out transparent payment methods for their transactions. PayID allows transactions across any currency or network, including the PayID Pokies game. Additionally, payment platforms like PayPal and Neteller gained traction as reliable alternatives. The Phenoms situation underscored the value of dependable transaction systems in such competitive arenas. 

They also vowed to take legal action against the developers they were working with, but that also seems like a dead end.

They also offered to sell the code that had been developed for them.

Nothing promising – they inevitably had to file bankruptcy…

Some players, however, refused to give up and began pursuing a class action suit against Phenoms. But considering the legality issues in this case, it is hard to say anything for sure. While we have no further updates on the matter, one thing is for sure, players were indeed cheated out of their money.

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