Now, it’s a race against the clock for both companies to find a new payment provider before Vantiv suspends its processing on February 29th.
Advertisement
New York’s Attorney General has attempted to shut down the operations of companies such as FanDuel and DraftKings but the issue is being appealed and it will likely months before the final argument has been made.
Mississippi Attorney General Jim Hood issued an opinion on Friday saying that fantasy sports betting is illegal in his state.
The mounting pressure against DFS directly influenced Vantiv’s decision. Jonathan Ellman, chief transaction and marketing counsel for Vantiv, said in a letter obtained by the newspaper that operators’ arguments in their defence “have been unsuccessful and/or rejected”.
It is not yet clear how much of the total daily fantasy industry payments Vantiv processes and the company said it would remain open to returning to the daily fantasy industry, according to the Times. But if another financial processing company does not step in to handle the tens of millions of dollars in transactions, or if major banks and credit card companies follow Vantiv’s lead, it could have crippling consequences for a $2 billion industry under siege by state attorneys general across the nation.
FanDuel and DraftKings do not handle player deposits and withdrawals directly.
Vantiv says it remains “firmly committed to the online gaming and fantasy gaming segments” and will continue to work with stakeholders for “a long-term solution to the ongoing DFS controversy”.
“We continue to review and consider ongoing developments in relation to daily fantasy sports, including this one, in assessing our position and obligations in relation to providing payment services to fantasy sports merchants”, PayPal said in a statement to USA Today.
The national debate over whether the online activity violates state gambling laws goes on elsewhere around the country but California lawmakers approved the regulations 64-1.
Advertisement
Will people lose their money? It contains a carveout for fantasy sports, as long as “all winning outcomes reflect the relative knowledge and skill of the participants”, among other provisions. Two years after the fact, the Verge reported that many were ultimately reimbursed, though some were still waiting.
