Daily Fantasy Sports
People protest in front of New York Attorney General Eric Schneiderman's office against his decision to shut down fantasy sports sites, FanDuel and DraftKings, in New York, Nov. 13, 2015. Reuters

Daily fantasy sports industry in the U.S. received a jolt Friday when Citigroup reportedly said it would begin blocking debit and credit card payments from New York to two of the largest websites in the business — FanDuel and DraftKings. The ban will stand until a court in New York makes a final decision on the legality of the daily fantasy sports, the bank said.

The daily fantasy sports industry has been at the center of a growing legal and legislative controversy since New York Attorney General Eric Schneiderman sued FanDuel and DraftKings in November, arguing that daily fantasy sports were a form of gambling, which is illegal in New York. The firms, contending that they offer games of skill, have continued to accept business from New Yorkers while the case works its way through the courts.

In January, the state Supreme Court Appellate Division in Manhattan ruled that the websites could continue operating while they appealed a judge's order to stop offering their services in the state.

Citgroup’s move makes it the second payment processor to stop payments to the fantasy websites, after Vantiv Entertainment Solutions said late last month it was walking away from FanDuel and DraftKings due to the legal uncertainty.

Following the announcement, FanDuel told Consumerist.com that it was “unaware of Citigroup’s attempts to prohibit their New York based customers from playing fantasy sports,” and added that “there are various payment options and companies that allow their customers to make their own decision about what fantasy sports they can play.”

Major banks have taken different stances on the matter. Bank of America declined payments to daily fantasy operators from New York customers since December, while JPMorgan Chase said its New York cardholders could continue to make payments on both websites.

The attorneys general of New York, Hawaii, Illinois, Nevada, Texas, Vermont and most recently, Mississippi, have issued advisory opinions against daily fantasy sports, stating it constituted gambling, according to Legal Sports Report.