DraftKings Looks For Decision On Online Paymnet Processing Firms
The legal battle in New York surrounding the legality of daily fantasy sports has got DraftKings fighting with all they have to overturn AG Eric Schneiderman’s plans to shut them down. The basic argument of Schneiderman is that daily fantasy sports is nothing less than real money gambling and that the legal loophole used until now via the Unlawful Internet Gambling Enforcement Act of 2006 was not meant for daily fantasy sports.
Legal fears of contravening the UIGEA of 2006 has got many parties involved in the DFS sector very worried as thoughts go back to the infamous Black Friday era. One such concerned party is that of online payment processor for DraftKings, Optimal Payments and Vantiv. As we reported last month they have threatened to no longer provide payment processing services to residents of New York due to AG Eric Schneiderman’s’ much publicized campaign to crack down on DFS in New York.
DraftKings filed a complaint on November 13 against these online payment providers and are claiming breach of contract. The thinking is that these online payment processing companies are relying on an out clause which would allow them to terminate their contracts with DraftKings if they are in violation of any laws such as th UIGEA of 2006. This would make them liable to federal penalties as the law expressly forbids “accepting any credit or funds from a person in conjunction with the latter’s participation in ‘unlawful Internet gambling.’”
The outcome of the case will set an important precedent as DraftKings are hoping and praying that DFS is defined as a game of skill which is excluded from the online gambling restrictions of the UIGEA Act.