Vantiv Shuts Out Daily Fantasy Sports Sites

The two major daily fantasy sports sites have suffered another major blow after Vantiv Entertainment Solutions, its payments processing company, said it would drop payments support for the companies at the end of the month.

According to a New York Times report, Vantiv told FanDuel and DraftKings that it would no longer support its payments processing because it was getting out of the industry of working with such sites. This follows months of legal battles the two sites have been facing. Vantiv said it would “suspend all processing for payment transactions” starting Feb. 29.

Reports indicate that the company said the decision was swayed by the views shared by state attorneys general. At least seven states have taken the stance that daily fantasy game sites were offering their own form of gambling, which is illegal in many states.

“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, chief transaction and marketing counsel at Vantiv, wrote in a letter obtained by NYT. “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.”

DraftKings provided a statement, but FanDuel did not.

“We are not aware of what Vantiv may or may not have told other industry participants about its plans,” David Boies, a lawyer for DraftKings, said in a statement. “However, to be clear, first, Vantiv has not told DraftKings that it plans to cease fulfilling its contractual obligations as of ‘Feb. 29, 2016’ (or any other date). Second, Vantiv is under court order to continue to fulfill its contractual obligation to DraftKings.”

Because the two companies do not handle the payments aspect to manage the deposits or withdrawals, without Vantiv, it would be difficult to operate — unless another payment processing company stepped in to take over.

Outside of Vantiv, other companies that process payments for these type of companies include PayPal, according to the NYT report, which noted that it’s not known how many businesses Vantiv was working with. Without Vantiv’s future involvement, this would put a major dent in what’s believed to be a $2 billion industry.

“We are aware of Vantiv’s recent decision to discontinue processing payments for daily fantasy sports services,” PayPal spokeswoman Martha Cass said in a statement. “We continue to review and consider ongoing developments in relation to daily fantasy sports.”

This is an interesting move for the payments processing company after it had shown support for the companies. But since the attorney general statements have come into play, it seems that Vantiv has had to follow the states’ perspectives on the matter.

“Vantiv remains firmly committed to the online gaming and fantasy gaming segments,” the Vantiv letter said. “As payments experts in the online gaming space, Vantiv will continue to work with stakeholders for a long-term solution to the ongoing D.F.S. controversy. When there is better clarity and long-term certainty around the regulatory and judicial landscape related to D.F.S., Vantiv may decide to resume processing these types of payment transactions.”