Vantiv to cease processing DFS payments

Legal uncertainty forces payment processor out of the market as daily fantasy ruled illegal in Mississippi 

Daily fantasy sports (DFS) operators FanDuel and DraftKings have suffered a major blow after payment processor Vantiv notified both firms it would no longer be involved in the sector. [private]

Vantiv sent letters to all of its DFS clients, including FanDuel and DraftKings, saying it would cease processing payments on February 29, according to the New York Post.

The company said the main reason was the ongoing legal uncertainty surrounding the industry, with Attorney Generals in New York, Illinois, Texas and Vermont ruling the activity illegal gambling.

“As you are aware, an increasing number of state Attorney Generals have determined that DFS constitute illegal gambling,” the letter said.

“Although in recent weeks DFS operators have raised numerous arguments to the contrary, to date those arguments have been unsuccessful and/or rejected.”

In response, DraftKings lawyer David Boies said the firm was “not aware” of what Vantiv may have told its other clients, and claimed not to have received a letter from the payment processor.

“To be clear, first, Vantiv has not told DraftKings that it plans to cease fulfilling its contractual obligations as of ‘February 29 2016’ (or any other date),” Boies said in a statement.

“Second, Vantiv is under court order to continue to fulfil its contractual obligation to DraftKings.”

However, Vantiv lawyer Douglas Baldridge confirmed to the Boston Globe that a letter had been sent to DraftKings, but declined to comment further.

The news comes as Mississippi Attorney General Jim Hood became the latest to rule DFS meets the definition of illegal gambling under state law.

Hood said state law prohibits betting on “the outcome of any athletic event, nor on any matter to be determined during an athletic event.”

He also said the notion that DFS is a game of skill is “irrelevant” because state law prohibits wagering “upon any game, play amusement […] or upon the result of any event or contingency whatever.”

The Attorney General noted that any change to the law to permit daily fantasy sports contests would be a matter for the legislature.