Daily fantasy sports operators DraftKings and FanDuel have been dealt another blow after CitiGroup Inc. announced it would no longer process DFS payments in New York State.
On Friday, Bloomberg Business reported that Citigroup would cease processing DFS transactions in New York pending the outcome of the state Attorney General’s legal action against DFS operators. Spokesperson Jennifer Bombardier said the ban would remain in effect until the courts reached a “final decision.”
New York attorney general Eric Schneiderman launched legal action against DraftKings and FanDuel last November, one week after issuing cease and desist orders to the two operations, based on his opiinion that DFS was illegal gambling under state law. The operators won a permanent stay of Schneiderman’s injunction last month, but a definitive conclusion of this issue is a long ways away.
Citigroup is the world’s biggest credit-card lender, and its loss would be a major blow to DFS operators already reeling from last week’s news that payment processor Vantiv Inc, would cease handling DFS transactions effective Feb. 29. The two main DFS sites are believed to have around 600k customers in New York who generated roughly $200m in entry fees in 2015.