The Nevada Gaming Control Board offered perhaps the most significant rebuke of daily fantasy sports operators today in a month full of them, finding that daily fantasy sports constitutes gambling. The Gaming Control Board wrote that because daily fantasy sports involves “wagering on the collective performance of individuals participating in sporting events,” daily fantasy sites must obtain licensing from the Nevada Gaming Commission to continue operating.
This presents a problem for DraftKings, FanDuel, and other daily fantasy operators. If they wanted to keep their games open to Nevada’s nearly three million residents, they could surely jump through the necessary hoops to secure regulatory approval. But doing so would admit that daily fantasy is gambling, a distinction daily fantasy operators are desperate to avoid. Therefore, Nevada will become the 12th state in which at least one of the major daily fantasy websites are banned.
Nevada is just a single (small) state, and daily fantasy sites will still make gobs of money without it. But Nevada certainly wields outsized influence in matters of gambling, and this is an especially unwelcome time for this ruling considering that both the FBI and the Department of Justice have opened probes into the legality of daily fantasy.
The Nevada Gaming Control Board, of course, isn’t an uninterested observer in the matter. The entire economy of Nevada—and Las Vegas especially—will benefit if daily fantasy sports is considered gambling. Besides another entity for state agencies to regulate, if daily fantasy is found to be on the wrong side of the Unlawful Internet Gambling Enforcement Act of 2006, one of Vegas’s biggest competitors is taken out.
This finding doesn’t exactly come as a surprise. According to the Law Vegas Review-Journal, earlier this year the Nevada Gaming Control Board chairman warned casinos to be very careful about legal issues if getting involved in daily fantasy, and casino and sports book owners have publicly said that daily fantasy is gambling.
You can read the Nevada Gaming Control Board’s full ruling below.
Update (10:25 p.m.): So far eight daily fantasy sites—including FanDuel but not including DraftKings—have said that they are pulling out of Nevada. Here is FanDuel’s full statement:
On behalf of our users in Nevada, FanDuel is terribly disappointed that the Nevada Gaming Control Board has decided that only incumbent Nevada casinos may offer fantasy sports. 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. This decision deprives these fans of a product that has been embraced broadly by the sports community including professional sports teams, leagues and media partners. We are examining all options and will exhaust all efforts to bring the fun, challenge and excitement of fantasy sports back to our Nevada fans. In the interim, because we are committed to ensuring we are compliant in all jurisdictions, regrettably, we are forced to cease operations in Nevada.
Photo via Shutterstock; image by Jim Cooke.