Citibank Stops Processing NY Daily Fantasy Sports Transactions
The week leading up to Super Bowl 50 should have been the US-facing daily fantasy sports industry’s big moment. Instead, the week was punctuated with even more bad news for the beleaguered vertical’s two biggest players.
On Friday afternoon Citibank announced that it would no longer be processing daily fantasy sports transactions that come out of New York. The company said that it was waiting for New York courts to rule on the validity of the New York Attorney General’s opinion that DFS constitutes illegal gambling.
Though Citibank is one of the largest payment processors in the United States, and their loss is absolutely devastating for Draft Kings and Fan Duel, there are still a few processors that are still willing to work with DFS sites.
In a statement to the New York Times that demonstrates how desperate things have become, Draft Kings’ officials said:
We are grateful that there are various payment options and companies that allow their customers to make their own decision about what fantasy sports they can play.
Citibank is no doubt a bit gun shy about anything that even hints at illegal gambling, and that’s terrible news for DFS sites. The question now is whether the massive Wall Street bank will block DFS transactions in other states, like Texas and Illinois, that have banned daily fantasy sports.
State lawmakers are also deeply concerned about the prospect of DFS promoting problem gambling. Between that and questions about its overall legality, the daily fantasy sports industry is a long ways from those heady days back in late summer when they covered the airwaves with advertising.
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