Fraud, breach of contract claimed in lawsuit linked to sports betting going dark at 2 WV casinos

BUFFALO, N.Y. — A civil lawsuit has been filed in connection with the sports betting controversy that’s impacted two casinos in West Virginia.

Delaware North iGaming, a subsidiary of Delaware North which owns the Wheeling Island Casino and Racetrack in Wheeling and Mardi Gras Casino in Nitro, filed a lawsuit Thursday in Delaware against Miomni Gaming and its CEO Michael Venner over the BetLucky sports-betting platform that went dark March 6.

The lawsuit alleges neither the company nor Venner told Delaware North it didn’t own the intellectual properties that operated the platform. Delaware North said it only found out after the Cypress-based company that does own the platform, Entergaming, pulled the plug over a contract dispute with Miomni.

“During negotiations for the joint venture, Miomni and Venner repeatedly represented to DNG (Delaware North IGaming) 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,” the lawsuit said. “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.”

MORE Read lawsuit here

DNG entered into a contract with Miomni to create the BetLucky company and its mobile app. Sports betting began at Wheeling Island and Mardi Gras on Dec. 27, It continued until March 6 when the service was interupted. DNG said it was only then it learned about the dispute between Miomni and Entergaming.

According to the lawsuit, “When Miomni could not resolve its licensing dispute with Entergaming-a dispute that Miomni intentionally concealed from DNG-Entergaming disabled the platform, leaving DNG, its affiliates and BetLucky with a sudden loss of business operations,”

Entergaming sent Miomni a Feb. 25 letter terminating the agreement and the back-end services.

Among other things the lawsuit alleges Miomni:

–Falsely claimed during contract negotiations and in the (joint-venture) agreement that Miomni owned all rights to the platform.

–Failed to disclose in a July 2018 professional services agreement and later in the BetLucky license that Entergaming owned and controlled the “back-end” of the platform and continued to provide services for it.

–Intentionally concealed from DNG, from DNG’s affiliates, and from BetLucky the existence of its contract dispute with Entergaming.

–Intentionally concealed from DNG, from DNG’s affiliates and from BetLucky Entergaming’s Feb. 25 letter and Entergaming’s termination of services under their agreement.

–Intentionally concealed from DNG, from DNG’s affiliates, and from BetLucky the true cause of the platform’s outages.

Delaware North isn’t certain when sports betting will return to its West Virginia properties. Back on March 29, state Lottery Director John Myers said it could be months before sports betting resumes.

“The West Virginia Lottery stands ready to work with Delaware North to bring both sportsbooks back online as quickly as possible once Delaware North has a solution in place,” Myers said at the time.

Meanwhile, sports betting continues at three other casinos in the state but they have no app. The BetLucky app did well in the few weeks it was up and running. Financial numbers from the Lottery show it brought in more than $210,000 in wagers at Mardi Gras in February and nearly $145,000 in bets at Wheeling Island.

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