DFS news roundup: Payment processor Vantiv bows out of industry

4 February 2016

By Dan Podheiser

The daily fantasy sports industry experienced a major setback late last week when a payment processor told the major DFS sites it would no longer handle their transactions and was leaving the industry entirely.

The New York Times reported that Vantiv Entertainment Solutions, which handles a "significant number of transactions" for both DraftKings and FanDuel, told its clients that it would "suspend all processing for payment transactions" in the U.S. on Feb. 29, 2016.

"We have decided that it is prudent to suspend processing for transactions involving daily fantasy sports due to the increasing uncertain regulatory and judicial environment around these operations," Vantiv CEO Charles Drucker said on an earnings call Wednesday, first reported by the Boston Globe.

Vantiv's exit from the DFS industry may not be so simple, however. Last week, DraftKings attorney David Boies released a statement saying, in part, "Vantiv has not told DraftKings that it plans to cease fulfilling its contractual obligations . . . Vantiv is under court order to continue to fulfill its contractual obligation to DraftKings."

Boies was likely referencing a Massachusetts judge's ruling in November that Vantiv, among other payment processors, was to continue handling credit card transactions for DraftKings in New York in the wake of the New York Attorney General issuing cease-and-desist orders to both DraftKings and FanDuel.

While Vantiv is not the only payment processor that handles transactions for DFS operators, its potential exit sparks even more trouble for an industry that is already facing legal hurdles from states that aim to regulate or, worse, ban the industry entirely.

• The DFS industry experienced a breakthrough in Indiana, as the state Senate approved legislation Wednesday that aims to regulate daily fantasy sports. The bill, SB 339, was introduced in January and passed through a Senate committee last week.

• In Mississippi late last week, Attorney General Jim Hood released his official opinion on daily fantasy sports, stating that DFS constituted illegal gambling according to state law. Hood cited the Mississippi Gaming Control Act, which says that "no wagering shall be allowed on the outcome of any athletic event."

• In the wake of Hawaii Attorney General Doug Chin's official opinion last week that DFS constituted illegal gambling under state law, DraftKings announced late Tuesday evening that it was pulling its business out of the state. DraftKings had reportedly been issued a cease-and-desist order from a Honolulu prosecutor on Monday, according to the Boston Globe.

• DFS operators are getting kicked out of the U.S. state by state, so DraftKings has decided to go global. The website will launch real-money contests in the U.K. in the coming days. DraftKings applied for and received a license from the UK Gambling Commission in August 2015.

• Meanwhile, it only makes sense that if DraftKings is going to run fantasy contests in the U.K., it would partner with the country's major football clubs. The DFS site has now inked deals with Arsenal, Liverpool and Watford.

DFS news roundup: Payment processor Vantiv bows out of industry is republished from Online.CasinoCity.com.