Skip to main content

FanDuel and DraftKings just lost a big payment processor

FanDuel and DraftKings just lost a big payment processor


A big blow to DraftKings and FanDuel

Share this story

Scott Olson/Getty Images

Vantiv Entertainment Solutions, a payments processor for daily fantasy sports sites DraftKings and FanDuel, told the companies this week it would stop processing wagers and would exit the space amid rising legal tensions, according to The New York Times. It's unclear what percentage of total payments Vantiv processes for DraftKings and FanDuel, which control more than 90 percent of the daily fantasy sports market. However, Vantiv's exit illustrates the mounting toll the companies face as numerous states continue to designate the activity illegal online gambling.

Daily fantasy sports is a hyper-accelerated form of wagering money on sporting outcomes dependent on the performance of real athletes. Because players don't have control over the outcome of a game, a handful of states like New York, Illinois, and Texas consider the activity gambling akin to online poker, which was banned by the Unlawful Internet Gambling Enforcement Act of 2006. DraftKings and FanDuel disagree, choosing instead to call daily fantasy sports a game of skill because players choose which athletes to wager on. That designation would exempt the activity from the 2006 ban.

"To date those arguments have been unsuccessful and/or rejected."

"As you are aware, an increasing number of state attorneys general have determined that daily fantasy sports constitute illegal gambling," wrote Jonathan Ellman, Vantiv's senior vice president and chief revenue counsel, in a letter obtained by The New York Times. "Although in recent weeks DFS operators have raised numerous arguments to the contrary, to date those arguments have been unsuccessful and/or rejected."

Vantiv appears caught in the middle of a battle between legislators and companies like DraftKings, whose executives have made it clear they intend to fight New York and other states in court despite how along it may take or how much it will cost. Vantiv first notified DraftKings and FanDuel back in November that it would stop processing payments in New York after Attorney General Eric Schneiderman filed a cease-and-desist order intending to shut the sites down. However, a series of legal back-and-forth's resulted in both websites being allowed to operate in the state while the trial continued.

Vantiv may have faced steep fines for working with DFS sites

Vantiv at that point asked a New York State Court judge to decide whether it could continue working with daily fantasy sports sites. Yet more legal battlegrounds arose, in Illinois and then Texas just last week. According to The New York Times, legal experts say payment processors are responsible for ceasing transaction activity with unlawful gambling operations or risk heavy fines. Vantiv did not respond to a request for comment. Without a payments processor, DraftKings and FanDuel could lose up to $40 million in annual business in New York, which houses the largest pool of daily fantasy players at 1.2 million users, according to research firm Eilers & Krejcik Gaming. PayPal, however, is still an active payment processor for the daily fantasy sports market, according to a person familiar with the companies.

DraftKings says the company hasn't heard from Vantiv regarding its decision to stop working with daily fantasy sports sites, adding an air of confusion to the ordeal. "We are not aware of what Vantiv may or may not have told other industry participants about its plans," David Boies, a DraftKings lawyer, said in a statement. "However, to be clear, first, Vantiv has not told DraftKings that it plans to cease fulfilling its contractual obligations as of ‘Feb 29, 2016’ (or any other date). Second, Vantiv is under court order to continue to fulfill its contractual obligation to DraftKings."

The company says it wants firmer ground to stand on before it considers working with DraftKings and FanDuel again. "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," Vantiv's letter said. "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."

Update at 6:10PM ET, Friday, January 29th: Added comment from DraftKings.

Update at 3:45PM ET, Wednesday, February 3rd: Updated the headline and first paragraph to reflect the fact that Vantiv only processes deposits and does not process payouts for FanDuel.

Today’s Storystream

Feed refreshed 16 minutes ago 10 minutes in the clouds

External Link
Jay Peters16 minutes ago
Google’s CEO talked to staff about the company’s recent cost cutting.

Sundar Pichai addressed employees’ questions about Google’s spending changes at an all hands this week, according to CNBC. “I think you could be a 20-person team or a 100-person team, we are going to be constrained in our growth in a looking-ahead basis,” Pichai reportedly said. “Maybe you were planning on hiring six more people but maybe you are going to have to do with four and how are you going to make that happen?” Pichai sent a memo to workers in July about a hiring slowdown.

In the all-hands, Google’s head of finance also asked staff to try not to go “over the top” for holiday parties.

External Link
Elizabeth Lopatto22 minutes ago
Insiders made the most money off of Helium’s “People’s Network.”

Remember Helium, which was touted by The New York Times in an article entitled “Maybe There’s a Use for Crypto After All?” Not only was the company misleading people about who used it — Salesforce and Lime weren’t using it, despite what Helium said on its site — Helium disproportionately enriched insiders, Forbes reports.

James VincentTwo hours ago
Nvidia’s latest AI model generates endless 3D models.

Need to fill your video game, VR world, or project render with 3D chaff? Nvidia’s latest AI model could help. Trained on 2D images, it can churn out customizable 3D objects ready to import and tweak.

The model seems rudimentary (the renders aren’t amazing quality and seem limited in their variety), but generative AI models like this are only going to improve, speeding up work for all sorts of creative types.

Welcome to the new Verge

Revolutionizing the media with blog posts

Nilay PatelSep 13
Richard Lawler1:02 PM UTC
Green light.

This week Friday brings the debut of Apple’s other new hardware. We’ve reviewed both the new AirPods Pro and this chonky Apple Watch Ultra, and now you’ll decide if you’re picking them up, or not.

Otherwise, we’re preparing for Netflix’s Tudum event this weekend and slapping Dynamic Island onto Android phones.

The Apple Watch Ultra on a woman’s wrist
Photo by Amelia Holowaty Krales / The Verge
External Link
Jess Weatherbed12:31 PM UTC
Japan will fully reopen to tourists in October following two and a half years of travel restrictions.

Good news for folks who have been waiting to book their dream Tokyo vacation: Japan will finally relax Covid border control measures for visa-free travel and individual travelers on October 11th.

Tourists will still need to be vaccinated three times or submit a negative COVID-19 test result ahead of their trip, but can take advantage of the weak yen and a ‘national travel discount’ launching on the same date. Sugoi!

External Link
Thomas Ricker11:00 AM UTC
Sony starts selling the Xperia 1 IV with continuous zoom lens.

What does it cost to buy a smartphone that does something no smartphone from Apple, Google, Samsung can? $1,599.99 is Sony’s answer: for a camera lens that can shift its focal length anywhere between 85mm and 125mm.

Here’s Allison’s take on Sony’s continuous-zoom lens when she tested a prototype Xperia 1 IV back in May: 

Sony put a good point-and-shoot zoom in a smartphone. That’s an impressive feat. In practical use, it’s a bit less impressive. It’s essentially two lenses that serve the same function: portrait photography. The fact that there’s optical zoom connecting them doesn’t make them much more versatile.

Still, it is a Sony, and

External Link
Corin Faife10:44 AM UTC
If God sees everything, so do these apps.

Some Churches are asking congregants to install so-called “accountability apps” to prevent sinful behavior. A Wired investigation found that they monitor almost everything a user does on their phone, including taking regular screenshots and flagging LGBT search terms.

External Link
James Vincent8:41 AM UTC
Shutterstock punts on AI-generated content.

Earlier this week, Getty Images banned the sale of AI-generated content, citing legal concerns about copyright. Now, its biggest rival, Shutterstock, has responded by doing ... absolutely nothing. In a blog post, Shutterstock’s CEO Paul Hennessy says there are “open questions on the copyright, licensing, rights, and ownership of synthetic content and AI-generated art,” but doesn’t announce any policy changes. So, you can keep on selling AI art on Shutterstock, I guess.

Thomas Ricker6:58 AM UTC
This custom Super73 makes me want to tongue-kiss an eagle.

Super73’s tribute to mountain-biking pioneer Tom Ritchey has my inner American engorged with flag-waving desire. The “ZX Team” edition features a red, white, and blue colorway with custom components fitted throughout. Modern MTBers might scoff at the idea of doing any serious trail riding on a heavy Super73 e-bike, which is fine: this one-off is not for sale. 

You can, however, buy the Super73 ZX it’s based on (read my review here), which proved to be a very capable all-terrain vehicle on asphalt, dirt, gravel, and amber fields of grain.

Richard Lawler12:25 AM UTC
The sincerest form of flattery.

I had little interest in Apple’s Dynamic Island, but once a developer built their spin on the idea for Android, I had to give it a try.

Surprisingly, I’ve found I actually like it, and while dynamicSpot isn’t as well-integrated as Apple’s version, it makes up for it with customization. Nilay’s iPhone 14 Pro review asked Apple to reverse the long-press to expand vs. tap to enter an app setup. In dynamicSpot, you can do that with a toggle (if you pay $5).

DynamicSpot app on Android shown expanding music player, in the style of Apple’s Dynamic Island in iOS 16.
DynamicSpot in action on a Google Pixel 6
Image: Richard Lawler
Richard LawlerSep 22
TikTok politics.

Ahead of the midterm elections, TikTok made big changes to its rules for politicians and political fundraising on the platform, as Makena Kelly explains... on TikTok.

External Link
Richard LawlerSep 22
The Twitter employee who testified about Trump and the January 6th attack has come forward.

This summer, a former Twitter employee who worked on platform and content moderation policies testified anonymously before the congressional committee investigating the violence at the US Capitol on January 6th.

While she remains under NDA and much of her testimony is still sealed,  Anika Collier Navaroli has identified herself, explaining a little about why she’s telling Congress her story of what happened inside Twitter — both before the attack, and after, when it banned Donald Trump.

Richard LawlerSep 22
But how does it sound?

Our review of Apple’s new AirPods Pro can tell you everything about the second-generation buds. To find out how you’ll sound talking to other people through them, just listen to Verge senior video producer Becca Farsace.

The Verge
Andrew WebsterSep 22
Our list of the best entertainment of 2022 keeps getting bigger.

We just added some notable entries to our running list highlighting the best games, movies, and TV shows of the year, including Return to Monkey Island, The Lord of the Rings: The Rings of Power, and Glass Onion: A Knives Out Mystery. Sorry in advance for your free time.

The best entertainment of 2022

Everything to play and watch this year

Andrew WebsterSep 22

The best instant cameras you can buy right now

We found the best cameras for your budget and needs

Sheena VasaniSep 22
The Verge
Richard LawlerSep 22
The Bootleg Ratio.

Policy Editor Russell Brandom digs into a phenomenon we’ve all seen on social media before:

I call it the Bootleg Ratio: the delicate balance between A) content created by users specifically for the platform and B) semi-anonymous clout-chasing accounts drafting off the audience. Any platform will have both, but as B starts to overtake A, users will have less and less reason to visit and creators will have less and less reason to post.

And now it’s coming for TikTok.