Fantasy Sports Lawsuit Takes Aim at Credit Card Companies
A new class action lawsuit filed in New York could alter the way credit card companies interact with fantasy sports sites. The suit alleges that Visa, MasterCard, American Express, and other banks are facilitating illegal gambling operations online by accepting payments on credit cards for the daily fantasy sites.
The allegations specifically target the sites DraftKings and FanDuel, but they could influence the Internet sports gambling industry for the future. According to the lawsuit, the banks and card issuers that permitted payments to these websites “knew or should have known” they were paying for online gambling, but they continued to allow the transactions despite the legal risks. Furthermore, the complaint claims the card companies made a profit from the potentially illegal transactions because of the transaction fees issued on card payments.
The complaint requests that DraftKings and FanDuel players receive complete refunds for the money lost on the websites, as well as the fees paid to the processing companies.
Earlier this month, New York Attorney General Eric Schneiderman issued a letter to FanDuel and DraftKings alleging that the sites violated state gambling laws.
“Unlike most traditional, season-long fantasy sports sites, which make most of their money from administrative fees and advertising, FanDuel and DraftKings take a cut of every bet. That is what bookies do, and it is illegal in New York,” Schneiderman wrote.
The letter also encouraged PayPal and Vantiv to stop all payment processing for New York customers using the websites.