Another day, another tough blow to daily fantasy sports.
Joe Drape of the New York Times reports Vantiv Entertainment Solutions, a company which handled payment processing for the DFS industry, told operators it would no longer deal with DFS transactions pending the industries ongoing court battle.
Vantiv told its clients, including DraftKings and FanDuel, that it would “suspend all payment transactions” related to DFS in the U.S. on February 29.
“As you are aware, an increasing number of state attorneys general have determined that daily fantasy sports (‘D.F.S.’) constitute illegal gambling,” Jonathan Ellman of Vantiv.com wrote in a letter obtained by The New York Times. “Although in recent weeks D.F.S. operators have raised numerous arguments to the contrary, to date those arguments have been unsuccessful and/or rejected.”
Vantiv could have faced civil or criminal charges if they didn’t back out under the Unlawful Internet Gambling Enforcement Act of 2006, which places responsibility on payment providers to prohibit restricted transactions when a sports website is offering illegal gambling services.
Vantiv seems to be caught in the middle of the pending DFS legal battle. They said in the same letter they’re “firmly committed to the online gaming and fantasy gaming segments,” and may resume processing transactions when its deemed legal.
The Times reports if another financial processing company doesn’t step in, or another credit card company or major bank steps away from handling the flow of millions of dollars in transactions, it could seriously hurt DFS companies beyond repair.
While this is a pretty big blow to DFS, as many of you know sites like Bovada and other sportsbooks as well as poker websites regularly are able to process payments and send payments despite their illegality so perhaps this isn’t the industry’s deathblow although it certainly doesn’t bode well for the industry going forward.