DraftKings Sues Payment Processors for Pulling Service
10 December 2015
The drama just doesn't end for the daily fantasy sports industry. DraftKings has launched a lawsuit in Boston against Vantiv and Optimal, two payment processing companies, over a breach of contract issue after they pulled their services. This pull came after the New York Attorney General filed a cease and desist warning, which DraftKings is currently contesting in court. This comes down to the effects of the UIGEA, and that's an extremely complicated topic for daily fantasy sports companies.
The Crux of the Issue
Here's the issue. The part of the UIGEA that affects payment processors is that they can get in trouble for processing deposits for online gambling that happens to be illegal. If daily fantasy sports is found to be illegal in some jurisdiction, and the company processes payments for it anyway, then they can be found in violation of the UIGEA. This is the angle that Optimal and Vantiv are both coming from, and they're really trying to protect themselves from a ridiculous law that's never worked like it was intended.
The New York Issue
In the state of New York, chance-based games are illegal to wager on, but skill-based games are. DraftKings contends that, unlike games like Baccarat or slots, daily fantasy sports is a game of skill. This issue is going to be decided in court anytime now, and that will ultimately be what decides this payment processing issue as well. For now, it's really just going to be a matter of time to see how this plays out because a positive decision in New York would stop giving Optimal and Vantiv reason to pull out of the state, which would presumably resolve this lawsuit immediately.
The Future of Daily Fantasy Sports
For better or worse, this court decision in New York is probably going to decide the future of daily fantasy sports in one way or another. If they get a positive result, that DFS is a game of skill, then that will pave the way for other states to make the same determination. However, if they get a negative result and the court decides that DFS is a game of chance, then this will likely domino over to other states with a similar set of gambling laws, and that would be a disaster for the industry.
06 February 2016Vantiv to Suspend Daily Fantasy Sports Payments
For the past six months or so, daily fantasy sports have been dealt setback after setback in what seems to be a series of dominoes that are taking their sweet time in falling over. For about 18 months, the top DFS providers got a ton of attention through aggressive marketing tactics and sponsorships and deals with everything from ESPN to major league sports teams. After a scandal broke last fall, they've seen a lot of negative attention as well. The Most Recent Developments Vantiv Inc.Read full article
21 January 2016Daily Fantasy Sports Not Allowed Says Maryland AG
Over the past few months, there have been a lot of questions about the legality of daily fantasy sports in multiple states. The Attorney General for New York sent a cease and desist letter to major companies like FanDuel and DraftKings, and they also hit some resistance from the AG in Illinois. Now the Attorney General of Maryland Brian Frosh has stated that it's not allowed under existing laws in the state. Where to Go From Here From here, Frosh has suggested one of two things.Read full article
19 January 2016Daily Fantasy Sports May or May Not Be Illegal in Texas
Daily fantasy sports have come under fire in New York from their Attorney General, and the biggest names in the business were forced to make a deal with the AG from Illinois after she determined that the events were illegal in that state as well. The Attorney General in Texas, however, is taking his sweet time with coming out with an opinion on the matter. Why the Delay?Read full article