By: Derek M. Ciulla

 

It seems like everyone is involved in fantasy sports these days. Co-workers, fellow students, even family members, but a New York Times report has placed a dark cloud over the future of fantasy sports sites.

 

An Ohio based company, called Vantiv Entertainment Solutions (“Vantiv”), processes payments for various fantasy sports sites, such as DraftKings and FanDuel.  Vantiv expressed that it will cease handling payments and withdraw from the $2 billion dollar industry by the end of this month.  Their stated reason for doing so was rather simple: currently, seven states (and counting) have determined that daily fantasy games are a form of gambling or are illegal under current laws.  It is evident that Vantiv sees the writing on the wall and intends to disassociate itself before the fantasy sports sites they contract with are prosecuted for illegal gambling.  However, it might not be so easy for Vantiv to exit the industry.  A lawyer for DraftKings expressed that Vantiv has a duty to fulfill its contract with the juggernaut fantasy sports site, and that it cannot just secede from its contractual obligations.

 

Regardless of Vantiv’s legal ability to cease processing payments by the end of this month for daily fantasy sports sites, the ultimate question becomes what other payment processing company is going to deliberately or knowingly break state law?  When a company like Vantiv is attempting to walk away from a multi-billion dollar enterprise, it clearly foreshadows the impending doom that these fantasy sports sites will likely face in the state that they operate out of. Without companies such as Vantiv processing payments for fantasy sports sites, the fantasy sports sites are futile.  People partake in fantasy sports to win money and if these fantasy sports sites cannot find companies willing to potentially break the law, participants will not get paid. Furthermore, DraftKings and FanDuel have already commenced legal action to determine the legality of their operations.  This will likely be a very costly and lengthy litigation that could very well determine their fate.

 

Derek is currently a 3L evening division student and a Staff Member with the Journal of High Technology Law at Suffolk University Law School.  He holds a B.A. in Sociology from Pace University.

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