FanDuel and DraftKings, the two embattled titans of the daily sports betting world have just lost a vital and potentially game-ending, component to their operations, according to a report by the New York Times.
Vantiv Entertainment Solutions, which provided payment processing for both firms, has decided to “suspend all processing for payment transactions” related to fantasy sports, the NYT reports.
Vantiv handled wagers and payouts, essential parts of the companies’ sportsbetting infrastructure.
The Times was able to acquire a letter written by Jonathan Ellman, a Senior Vice President for Vantiv, in which he says, “As you are aware, an increasing number of state attorneys general have determined that daily fantasy sports (‘D.F.S.’) constitute illegal gambling.” He continues by saying, “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.”
It’s not clear what portion of transactions Vantiv handled for DraftKings and FanDuel, or whether the companies work with other payment processors. But if the companies lose the capability to process payments entirely, their businesses could come to a standstill.
While this news is certainly devastating to fans of daily sports betting, and the companies built around them, Vantiv’s move may not come as a shock after the legal trouble daily sports betting has been having; most notably in New York and Illinois.
Vantiv appeared to keep the door open to stepping back into the fantasy sports business. “As payments experts in the online gaming space, Vantiv will continue to work with stakeholders for a long-term solution to the ongoing DFS controversy,” the company said in the letter. “When there is better clarity and long-term certainty around the regulatory and judicial landscape related to DFS, Vantiv may decide to resume processing these types of payment transactions.”