Delaware North sues Miomni Gaming for fraud over West Virginia debacle

Delaware North is to sue its former sports wagering partner for fraud and contract breaches, after sportsbooks at its Wheeling Island Hotel Casino Racetrack and Mardi Gras Casino and Resort in West Virginia has to terminate services.

The lawsuit alleges that Miomni Gaming and Michael Venner, its chief executive officer, fraudulently misrepresented its ownership of a key part of the BetLucky sports wagering platform, and breached the joint-venture contract.

Filed late last week in the Court of Chancery for the State of Delaware, relates to a joint-venture entered alongside Delaware North iGaming, the Delaware North subsidiary, and Miomni’s “willful breach” of the parties’ contract.

The two had entered an agreement to develop and manage BetLucky Interactive for its sports betting and igaming platform, which was intended to serve as the sportsbook technology platform for DNG’s gaming properties, in states where the activity is legal.

Launching in late December at the properties, and statewide via the mobile app, interruption first began early last month, leaving the mobile app and the casino sportsbooks, which relied on the platform, unable to accept new sports wagers.

This was attributed to Miomni’s contract dispute with third-party technology supplier Enterg Software Solutions Limited, a Cyprus-based company known as Entergaming.

After DNG further investigated the dispute, it notified the West Virginia Lottery Commission on March 29 that it was taking steps to terminate its partnership with Miomni.

As a result of this, DNG has been unable to operate its West Virginia sportsbooks and its mobile app, causing financial losses and inconveniencing West Virginia customers.

DNG stresses that it is continuing to honour and redeem all resulted bets, as well as providing customers with detailed information about how they can access their accounts and withdraw their funds.

The lawsuit comments: “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.

“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.”

Furthermore, following communications with Entergaming, DNG states it learned that Miomni’s and Venner’s representations were “false” and “fraudulent” and that Miomni never owned the source code for part of the “back-end” of the platform – it only licensed it from Entergaming.

“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,” the lawsuit goes on to say.

It is also detailed that Entergaming sent Miomni a letter in late February terminating the agreement and the back-end services.

“With these discoveries in March, it became clear that Miomni and Venner had engaged in an ongoing pattern of misrepresentation and bad faith,” it’s added.

DNG is seeking monetary damages and other relief, including an orderly transfer of Miomni’s membership interest in BetLucky in accordance with the joint-venture agreement.

The casino operator continues “to evaluate all of its options to once again provide sports wagering services and believes that identifying and implementing a solution could take several months or longer.”