A major payment processor will cut ties with daily fantasy companies next month, delivering another significant blow to their business operations.
The New York Times reported Friday that Vantiv Entertainment Solutions informed daily fantasy operators that it would stop processing transactions on Feb. 29, citing the opinion of the attorneys generals in New York, Texas, Mississippi, Hawaii and Illinois that fantasy games are illegal according to their state laws.
Vantiv said in a letter that the company would evaluate its decision once the legal issues are decided. The percentage of deposits and payments that Vantiv processes is unknown, but it's considered a significant portion.
Among Vantiv's clients are DraftKings and FanDuel.
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DraftKings outside counsel David Boies issued a statement saying the company had not been informed that Vantiv planned to discontinue its services. He said Vantiv is under court order in Massachusetts to continue to fill its contractual obligation.
Vantiv, PayPal, PaySafe and credit card companies have been targeted in class action suits filed by daily fantasy sports players.
Payment processors such as Vantiv are increasingly concerned because those who participate in illegal gambling could be subject to penalties under the Unlawful Internet Gambling Enforcement Act of 2006.
"We continue to review and consider ongoing developments in relation to daily fantasy sports, including this one, in assessing our position and obligations in relation to providing payment services to fantasy sports merchants," PayPal said in a statement to USA Today. "We will take the time necessary to carefully review ongoing developments and will be notifying our merchants and customers if and when we make any decisions that involves the provision of PayPal services to fantasy sports services."
