Vantiv Entertainment Solutions, a payment processing company that handles a "significant number of transactions" for DraftKings and FanDuel, notified the operators last week that it "would no longer handle their payments and in fact was leaving the industry altogether," according to Joe Drape of the N.Y. TIMES. Vantiv told its clients that it would "suspend all processing for payment transactions" related to DFS in the U.S. and its territories on Feb. 29. The company "cited the unfavorable opinions that have been issued by state attorneys general in recent months." Seven states, including Mississippi on Friday, have "concluded that daily fantasy games were a form of gambling or were illegal under their current laws." The DFS sites "do not handle players' deposits and withdrawals, leaving that to payment processors like Vantiv." Without them, sites like FanDuel and DraftKings "are essentially unable to operate." It is "not known what percentage of payments Vantiv handles in the industry, but it is seen as a major player." If another company does not "step in to handle the tens of millions of dollars in transactions, or if major banks and credit card companies follow Vantiv’s lead, it could have crippling consequences" for the $2B industry. Texas Attorney General Ken Paxton last week "joined New York and Illinois, saying that daily fantasy sports are not legal under its state law." These rulings have "prompted FanDuel and DraftKings to initiate costly and probably lengthy litigation." Drape noted with Texas accounting for more than 5% of those companies’ players, FanDuel and DraftKings "are at risk of losing more than" 25% of their customers (N.Y. TIMES, 1/30). Meanwhile, in Mississippi, state AG Jim Hood declared that betting on fantasy sports is "illegal under Mississippi law." Hood "issued that opinion Friday morning after receiving a request from the Mississippi Gaming Commission" (WMCACTIONNEWS5.com, 1/29).
