With a cloud of uncertainty circling the legitimacy of daily fantasy sports, the Nevada Gaming Control Board (NGCB) recently ruled to cease all operations in the Silver State. By accepting money, the games have been determined to constitute gambling and only incumbent Nevada casinos may apply for a license to operate fantasy games.
Through an “exhaustive analysis” by the NGCB, the games are considered sports wagering, indicated A.G. Burnett, Chairman of the Board. The analysis states daily fantasy sports involves “wagering on the collective performance of individuals participating in sporting events.” The operator would therefore require a sports pool gaming license.
“We are saying that daily fantasy sports are a gambling game under the statutory definition,” Burnett told ESPN. “We’re also saying that these are sports pools, which is when someone is in the business of accepting wagers on sporting events through any system or method of wagering.”
The decision comes amid a growing concern by regulators of fantasy sports operating unlicensed. Daily fantasy sports operators such as DraftKings and FanDuel are currently under investigation by the Department of Justice and the FBI regarding whether, by accepting money, they are breaking the rules of the UIGEA Act of 2006.
Daily fantasy games charge players an entrance fee, which allows them to build a team of real-world athletes, and pays out winnings in cash. Operators contest that games are legal due to a clause in the Act that allows for financial rewards in online games of skill. Players have now been blocked from entering contest in Nevada, as in various other states.
“We understand that the gaming industry is important to Nevada, and for that reason, they are taking this exclusionary approach against the increasingly popular fantasy sports industry,” commented a spokesperson for DraftKings. “We strongly disagree with this decision and will work to ensure Nevadans have the right to participate in what we believe is legal entertainment that millions of Americans enjoy.”
“This decision stymies innovation and ignores the fact that fantasy sports is a skill-based entertainment product loved and played by millions of sports fans,” said Justin Sacco, FanDual Communications Director. “This decision deprives these fans of a product that has been embraced broadly by the sports community.”
The American Gaming Association stated, after the ruling, “The casino gaming industry has repeatedly called for greater legal clarity on daily fantasy sports. We appreciate that the NGCB has provided that clarity. We will seek additional clarity in other jurisdictions, as eliminating ambiguity is in the best interests of all parties.”