Payment processor to stop processing DFS charges on Feb. 29

[The Buzz]

Vantiv Entertainment Solutions, the processing company, told its daily fantasy clients, which include FanDuel and DraftKings, that it would "suspend all processing for payment transactions" related to daily fantasy sports in the United States and its territories on Feb. 29.

Vantiv handles a large majority of the payment processing for both FanDuel and DraftKings. This could be a big blow for the DFS industry.

http://www.nytimes.com/2016/01/30/sp...tasy.html?_r=1

[PROFRBcom]

Big opportunity for someone else to step up and make a boatload of cash. Makes me wish I didn't live in the USA. Would seem like a much safer business to run offshore. Given the gray nature of things at the moment, their processors could probably jack up the rates too. A true cash cow opportunity!

[TravG]

Big opportunity for someone else to step up and make a boatload of cash. Makes me wish I didn't live in the USA. Would seem like a much safer business to run offshore. Given the gray nature of things at the moment, their processors could probably jack up the rates too. A true cash cow opportunity!

Absolutely! I do not think they will have a problem finding someone. It is only "illegal" by the loosest sense of the word in a few states and as far as I know they are not accepting players from those states anymore. If I had a processing system I would be all over this. I cant even imagine the amount of dollars that goes though their processor and for that processor to drop them they must be huge and DFS must only be a small portion of their business.

[universal4]

I have to wonder about the motivation behind them pulling the plug.

Have they been warned through official channels?
Are they concerned they risked a seizure similar to what we saw at Neteller years ago?
Are they incorporated in a state that has taken a strong stand against DFS?

The answers to these as well as a few other questions it raises may well affect the decision of someone stepping in to fill the void.

Rick
Universal4

[PROFRBcom]

^^ Very salient points you've raised there. I wonder if there is any way to look up said data?

[hotfreebingo]

I can only imagine that there must be a good reason, but fantastic luck to whoever steps in!

[GPWA Aaron]

I have to wonder about the motivation behind them pulling the plug.

Have they been warned through official channels?
Are they concerned they risked a seizure similar to what we saw at Neteller years ago?
Are they incorporated in a state that has taken a strong stand against DFS?

The answers to these as well as a few other questions it raises may well affect the decision of someone stepping in to fill the void.

Rick
Universal4

It's a risk/reward calculation. When they look at their revenues, my guess is the percentage that come from DFS operators is miniscule. Why jeopardize your company over a tiny fraction of your revenue? (more on this from the Boston Globe: http://www.bostonglobe.com/business/...v9J/story.html -- they had $3.1 billion in revenues in 2015.)

The DFS companies themselves have been doing the same calculation in regards to how they respond to different states demanding they stop operating there. Nevada, and now Hawaii have said DFS is illegal under state law. Those markets are tiny, so DraftKings and FanDuel complained, but ultimately complied because it wasn't worth fighting. New York, Texas and Illinois, on the other hand, are too important to give up without a fight.