News, Education and Events Decoding Digital Payments & Fraud

News, Education and Events Decoding Digital Payments & Fraud

Report: Vantiv Drops DraftKings, FanDuel – Feb. 1, 2016

Report: Vantiv Drops DraftKings, FanDuel

Feb. 1, 2016

Report: Vantiv Drops DraftKings, FanDuel As some state governments have begun to challenge the legality of daily fantasy sports Websites, Cincinnati-based payments processor Vantiv apparently has decided the uncertainty is too risky and it will no longer process online transactions for those sites. In a letter obtained by the New York Times to DraftKings and FanDuel—the biggest names in the industry—and other daily fantasy service clients on Friday, Vantiv Entertainment Solutions informed the companies it would cease processing those transactions in the U.S. on Feb. 29. According to the Times report, the letter cited opinions in seven states, including one delivered on Friday by Mississippi Attorney General Jim Hood, that have declared daily fantasy sports to be gambling and, hence, illegal.

Vantiv has not publicly commented since Friday, but the Times report quoted a statement by DraftKings attorney David Boies that said “first, Vantiv has not told DraftKings that it plans to cease fulfillment of its contractual obligations as of ‘Feb. 29, 2016’ (or any other date). Second, Vantiv is under court order to continue to fulfill its contractual obligations to DraftKings.”

FanDuel today released a statement on the matter that said it could not comment directly on Vantiv’s decision, but it wants its users “to be aware that there are many other payment processors available, as well as PayPal, and this decision will not impact their ability to play on FanDuel, withdraw funds or have any other impact on the user experience.”

The company on Friday noted legislative proceedings in several states that help clarify the legality of its service including passage of industry-wide regulations in California, positive legislative committee reports in Florida and Indiana and future votes in Virginia, Nebraska and Wisconsin.

As FanDuel noted in its response, PayPal also processes payments for companies in the daily fantasy sports segment. The online payment pioneer said through spokesperson Martha Cass that it is “aware of Vantiv’s recent decision to discontinue processing payments for daily fantasy sports services. We continue to review and consider ongoing developments in relation to daily fantasy sports.”

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Daniel Leibovitch