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Rachael Price April 22, 2019 3 min read
Delaware North Sues Miomni for Extortion Scheme and Fraud
- Delaware North sues Miomni over fraudulent contracts
- Miomni’s lack of clarity has led to a shutdown of DNG-owned properties
- Miomni knowingly hid vital information from its partners
Delaware North is suing its main supplier, Miomni, after a forcible shut-down over alleged contract breaches in West Virginia, the sports betting operator announced in a press release.
Delaware North vs Miomni – What Has Happened
Six months ago, Delaware North and Miomni Gaming, a sports betting operator and a supplier of sports betting products and technologies, entered a promising partnership which turned sour very quickly.
Delaware North published a press release last week, explaining that Miomni and its CEO Michael Venner had illegally offered to support the proprietor BetLucky online sports betting platform. However, Miomni lacked the expertise and outsourced the responsibility to a third-party company, Entergaming, which withdrew support on March 6, 2019.
Delaware North made a full disclosure about the issue and more in the press release and the company also backed the statement with a lawsuit, filed in the Court of Chancery for Delaware.
As a result of the dispute, both Mardi Gras and Wheeling Island casinos have been shut down and await a new supplier to restore their functionality to normal.
Is the Issue?
Delaware North is suing Miomni over misleading the company over the use of third-party solutions. Originally, DNG thought that Miomni Gaming will provide a full-blown platform on its own.
However, Miomni had been using third-party suppliers to maintain betting platforms for it in both West Virginia and New Jersey.
There have been claims that even in the original contract, there was information that Miomni is not capable of providing all the requested solutions in-house, meaning that third-party companies were the most logical step. The lawsuit, however, stipulates the opposite:
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.
In honesty, though, it seems that the issue came from the fact that Cyprus-based Entergaming was never fully acquired by Miomni which was part of the original intention and this is why the current spat has erupted.
Originally, Miomni was pushing to gain control over Entergaming, allowing the company to handle all of Delaware North’s needs in-house. With the deal never actually taking shape, Miomni was indirectly breaching the original agreement, DNG believed. The lawsuit also added that:
Miomni never notified DNG or its affiliates that Miomni was utilizing Entergaming as a subcontractor, and Miomni never sought approval from DNG or its affiliates to utilize Entergaming to perform services as required under the PSA.
Why is Delaware North Enraged?
If that was a simple matter of misinterpreted contract obligations, Delaware North would have probably turned a blind eye. However, the sports betting platform collapsed first on February 5, 2019 and then once again on March 6, 2019.
With Delaware North pressing the issue, Miomni finally admitted that they had outsourced the technical and support work to Entergaming. Delaware North then said that Miomni had knowingly mislead the company engaging in a fraudulent extortion scheme.
Things get even worse, because Miomni only came clear about the developments on March 12. However, the company knew that Entergaming was pulling out their support after the failed acquisition between the two companies.
Failing to notify any of its partners, Miomni may indeed be in a lot of legal hot water and Delaware North may just as well have a case.