The Daily Fantasy Sports (DFS) industry in the U.S. has faced a severe backlash during the last few months as a number of state attorneys have gone after DFS operators and have sought to have these DFS websites blacklisted. Vantiv, one of the biggest online payment processing companies for the DFS industry has also follow suit after announcing that it will stop processing all transactions originating from DFS websites from the 1st of March 2016.
FanDuel and DraftKings, two of the biggest DFS operators in the nation along with other smaller operators have faced legal proceedings in states like New York, Nevada and Illinois as state attorney generals have pursued the legal path that these DFS games are similar to online gambling and hence must be regulated and taxed. If the courts do rule in favour of the state, these DFS operators could end up paying the state millions of dollars in gaming taxes, something that they are not willing to do.
Since these DFS websites are facing the possibility of legal action in multiple states, Vantiv has decided to play a safe game and distance itself from these DFS websites. The company sent out a letter to its DFS customers informing them of its decision and has advised them to find an alternate provider from March as Vantiv will no longer be able to process anymore payouts and wagers.
Vantiv has stated that there is currently too much opposition to the DFS industry and while companies such as FanDuel and DraftKings have responded to the allegations raised by state attorneys, their arguments have so far not been successful.
The online payment provided stated that while it highly regarded its online gambling and DFS customers, it had no other option but to cut ties with them for now as there is no clarity into the future of the DFS industry. Vantiv confirmed that once the legal framework for the DFS industry is clarified and things settle down, it would be happy to start processing payments once again for the DFS industry.
PayPal one of Vantiv’s biggest competitors stated that for now they had no plans to pull out of the DFS market. In a statement, Martha Cass, a PayPal representative said “We are 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.”
