And I already have them in uniform....
"Citigroup blocks customers in N.Y. from paying for fantasy sports" by Dan Adams, Deirdre Fernandes and Curt Woodward Globe Staff February 05, 2016
The steady erosion of the US daily fantasy sports industry continued Friday, as Citigroup Inc. began blocking credit card payments from its customers in New York to the two largest fantasy operators.
Got any squares left or are you all filled in?
With DraftKings Inc. and FanDuel Inc. battling New York Attorney General Eric Schneiderman, who says the companies are violating gambling laws, players in that state will not be able to use Citigroup cards to deposit money into their accounts, the financial services company said.
“We have taken steps to block transactions at DraftKings and FanDuel by New York residents pending a final decision by the courts,” Citigroup spokeswoman Jennifer Bombardier said in a statement. She did not respond to questions about what prompted Citigroup, one of the world’s largest credit card lenders, to block the transactions. DraftKings declined to comment.
In a statement FanDuel said, “We are unaware of Citigroup’s attempts to prohibit their New York based customers from playing fantasy sports but 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.”
Bank of America Corp. has been declining payments to daily fantasy operators from its customers in New York since December; that block is still in place, the company confirmed Friday. JPMorgan Chase & Co., however, said its New York cardholders can still use its cards on both sites.
Citigroup’s decision, first reported by Bloomberg, comes as Schneiderman has sued DraftKings and FanDuel to force them to withdraw from New York, one of the most lucrative markets for fantasy sports in the United States. DraftKings has previously said it expected to collect about $100 million in entry fees in 2015 from players in New York. Attorneys general in several other states have also determined fantasy sports contests with cash prizes violate their local gambling laws, but none have gone after the companies as aggressively as has Schneiderman.
Related:
DraftKings hits back in appealing for N.Y. business
DraftKings gets another N.Y. reprieve
State panel urges rules for fantasy sports sites
Lottery wants in so they can tax it.
Proposed fantasy sports rules too strict, companies say
Texas AG says daily fantasy sports are illegal gambling
DraftKings adopts some of AG’s rules plan
Doesn't he have other things to do like investigating $calpers and looking into dark pools?
Under federal gambling laws, financial institutions are particularly vulnerable to prosecution if they are found to handle money related to illegal gambling.
Yeah, right!
They don't want to $ettle any potential fines?
Vantiv Inc., a critical payment processor that handles much of the money flowing in and out of the daily fantasy industry, notified clients last week that it intends to withdraw from the market at the end of February because of legal uncertainty. However, DraftKings previously obtained a court order from a Boston judge that requires Vantiv to continue processing its payments.
Industry experts said that Vantiv’s skittishness and Citigroup’s decision Friday could prompt other financial companies to rethink their involvement in daily fantasy sports. “When a bigger bank takes a position like that, it often sets market expectations,” said Sean Mahoney, an attorney at Boston-based K&L Gates LLP who specializes in banking regulations. “There’s a ‘follow the leader’ mentality.”
Daily fantasy companies are under pressure on multiple fronts, including investigations by federal officials in several states. In response, a trade association of firms including DraftKings and FanDuel has launched a massive lobbying effort to convince state legislatures to explicitly legalize fantasy contests. But that hasn’t stopped anxious banks from taking steps to distance themselves from the controversial industry.
“As the more attorneys general are showing an interest, the more the reputational risk increases for banks,” said Steve Kenneally, vice president of the Center for Payments and Cybersecurity at the American Bankers Association. “This is a dark gray area right now.”
Like that ever stopped them before!
DraftKings has sought to reduce the risk of losing customers at home by expanding abroad. On Friday the company said its long-awaited expansion in the United Kingdom was finally underway.
Meanwhile, the New York Times reported Friday that the US Internal Revenue Service and the FBI are investigating whether fantasy games affect problem gamblers.
Wall Street only gets fined, and since when has lottery-sponsoring government ever cared about problem gamblers?
The Times also said Major League Baseball, an investor in DraftKings, had formally notified the company it was considering ending their marketing agreement if Draft-Kings was not in compliance with New York State law.
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I wonder if this will get the American public breaking some bank windows. Nothing else seems to.
"Fantasy sports payment firm may opt out" by Dan Adams and Curt Woodward Globe Staff January 29, 2016
Vantiv Inc., the payment processor that handles much of the money flowing through the daily fantasy sports business, notified clients Friday that it will withdraw from the market next month, a blow to companies that rely on its software.
In a copy of a letter obtained by the Globe, Vantiv told customers it made the decision because of the legal uncertainty around daily fantasy contests, and that it would stop processing all transactions related to the embattled industry on Feb. 29.
“As you are aware, an increasing number of state attorneys general have determined that daily fantasy sports (“DFS”) constitute illegal gambling,” the letter reads. “Although in recent weeks DFS operators have raised numerous arguments to the contrary, to date those arguments have been unsuccessful and/or rejected.”
However, Boston-based DraftKings Inc., one of the two largest daily fantasy companies along with New York’s FanDuel Inc., previously obtained a court order from a Boston judge that requires Vantiv to continue processing its payments.
David Boies, an attorney for DraftKings, said the company had not received a letter from Vantiv.
“We are not aware of what Vantiv may or may not have told other industry participants about its plans,” Boies said in a statement, “Vantiv is under court order to continue to fulfill its contractual obligation to Draft-Kings.”
Douglas Baldridge, a lawyer for Vantiv, confirmed that the letter had been sent but declined further comment. FanDuel declined to comment.
David O. Klein, an attorney who advises fantasy sports companies, said the industry’s survival may depend on whether other payment processors are willing to replace Vantiv. Currently, the company helps most operators accept entry fees and pay out prizes.
“Recently, [Vantiv’s] stance was that they weren’t on-boarding any new fantasy sports operators until they had further clarity as to where the regulatory environment was headed,” Klein said. “I guess based upon what’s happened in the past few weeks, they’ve decided enough is enough and it’s not worth the risk.”
Banks and payment processors like Vantiv are “the first in the line of fire” under federal laws that outlaw gambling, Klein said, adding that prosecutors can bring federal charges even for violations of state law.
Analysts expected players to spend about $3 billion on the contests in 2015, more than triple the amount spent the year before. But the flurry of legal problems has also slowed the industry’s growth. The companies are not profitable.
Matthew Chatlin, the chief executive of smaller daily fantasy company OwnThePlay, said he was worried that players would assume their deposits at daily fantasy sites are in jeopardy because of Vantiv’s action.
“The money isn’t going away,” he said. “All your money remains in a segregated bank account.”
Daily fantasy sports have been under intense legal scrutiny by federal investigators and attorneys general in multiple states, who are probing whether the contests are legal under state and federal gambling laws. In response, an alliance of daily fantasy companies led by DraftKings and FanDuel has mounted a nationwide lobbying blitz, and some two dozen state legislatures are considering bills to legalize the contests.
Don't you wish they had shown the same compunction towards the bank looting schemes rather than taking kickbacks in the form of fines?
Amid those battles, Vantiv had sought clarity from courts in Massachusetts and New York about whether it could continue to work with DraftKings and other fantasy operators. A judge in Massachusetts last fall ordered Vantiv to continue doing business with DraftKings; a similar case in New York is still pending.
Since New York Attorney General Eric Schneiderman determined in early November that daily fantasy sports are illegal in his state, attorneys general in Texas, Illinois, Vermont, and Hawaii have followed suit, saying the games violate gambling laws in their states. Earlier, Nevada regulators effectively forced the industry to flee that state after ruling that fantasy sports operators needed to secure gambling licenses. And on Friday, the Mississippi Gaming Commission said daily fantasy sports are “illegal in the state of Mississippi under current law.”
The most serious challenge to the business so far is from Schneiderman, who is suing to shut down DraftKings and FanDuel.
They have to rise up and meet it, to put it in football terms.
Massachusetts Attorney General Maura Healey has said she will not crack down on DraftKings and its competitors because state law doesn’t explicitly ban fantasy contests for cash. Instead, she has proposed increased regulation of the industry, including a ban on players under 21 and the elimination of contests based on college sports.
Vantiv’s decision was first reported by the New York Times.
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Also see: Fantasy sports firms search for ways to keep cash flowing
"DraftKings has the chutzpah, backing to go big" by Curt Woodward, Globe Staff 11/07/2015
Right down to the damn word choice.
If you wind up in a street fight, it’s a good idea to have some muscular friends backing you up.
Same with wars.
DraftKings Inc. knows the feeling. The fantasy sports startup has spent the past few weeks pursued by government regulators and casino industry competitors who are asking whether the industry is just a form of unregulated gambling and is operating outside the law.
Those kind of questions could spell trouble for a company that’s just a few years old. But take a look at the big-time players behind the fantasy sports startup, and it becomes much easier to see how DraftKings could emerge to lead a new era of consumer tech in Boston.
DraftKings has raised more than $600 million since 2012, with an investor list that has expanded well beyond the normal roster of venture and private-equity firms to include a who’s-who of the sports-media industrial complex: Fox Sports, Major League Baseball, the NHL, and the owners of the New York Knicks, New York Rangers, Los Angeles Dodgers, Dallas Cowboys, and New England Patriots.
The SMIC!
That powerful coalition means DraftKings has the momentum to keep growing despite the pushback from old-economy regulators and rivals, following a pattern set by startup heroes such as transportation-app maker Uber Technologies Inc.and home-rental service Airbnb Inc.
Paul English, the Boston entrepreneur and cofounder of travel company Kayak Software Corp., said DraftKings has been “firing on all cylinders” as it spends millions of dollars on advertising in an effort to become a household name.
“They’ve hit a market, they’re great local recruiters in Boston, and they’re certainly going big on branding,” English said. “In the long term, technology investment usually wins. If you can innovate, it will win.”
Time to start kayaking in earnest.
In fantasy sports, competitors assemble virtual teams from professional rosters and score points based on the individual performances of the players on game day.
See mine at the end of this post.
The daily fantasy sports market, which offers short-term games for cash prizes, has grown quickly in the past few years, collecting about $1 billion in entry fees from players in 2014, according to industry analysis firm Eilers Research LLC of Anaheim Hills, Calif.
Those fees are expected to climb to nearly $4 billion this year, about $8 billion next year, and $17.7 billion by 2020, Eilers said.
Eilers also estimated that there are fewer than 4 million active, paying players in the “daily” segment occupied by DraftKings and its chief competitor, FanDuel Inc. of New York, compared with an estimated 46 million players of traditional season-long games in North America. That suggests the market has room to grow.
DraftKings, meanwhile, is looking across the Atlantic and beyond.
A clean Brexit?
The company has a gambling license in the United Kingdom, where online betting is legal and widespread, and plans to start offering games there later this year. That could be the first step in a global expansion, particularly if DraftKings finds a product for soccer — the world’s most popular sport — said Christy Keenan, research chief at Glasgow-based industry analysis site SuperLobby.com.
“Solve the soccer quandary, crack the UK, and we could see a global [daily fantasy] boom — rather than the current US one that we are currently experiencing,” Keenan said.
Can you bet on tennis?
Analysts and tech watchers say DraftKings has another thing going for it: a go-for-it attitude normally associated with West Coast tech titans. Add that to a sports-crazy town with lots of technically savvy marketing talent, and Boston could have a new anchor company.
GE just displaced them.
“They weren’t conservative. They saw an opportunity and they’ve leaned in like crazy,” said Rob Go, an investor with Boston’s NextView Ventures. “To their credit, these guys have been super aggressive about trying to be a fast-growing, monster company. And this [Boston] market could use more of that.”
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MY SUPER BOWL ROSTER:
QB: Newton (Car)
RBs: Stewart (Car)
WRs: Brown (Car), Norwood (Den), and Caldwell (Den)
TE: Olson (Car)
SPEC TMs: Carolina
DEF: Carolina
I also predict a concussion for Manning.
Wanna bet on it?
So where do you think you will be watching the game?
Scroll my Sports section to see how my team is doing.
