The Nevada Gaming Control Board has issued a cease-and-desist notice to operators of daily fantasy sports in the state, having concluded that the activity constitutes gambling and thus requires a licence.
In a Notice to Licensees issued on Thursday, chairman AG Burnett said the board has analysed the legality of pay-to-play daily fantasy sports and whether it conflicted in any way with Nevada state law.
“Based on these analyses, I, along with board staff, have concluded that DFS constitutes gambling under Nevada law,” writes Burnett.
The statement continues: “…Because DFS involves wagering on the collective performance of individuals participating in sporting events, under current law, regulation and approvals, in order to lawfully expose DFS for play with the state of Nevada, a person must possess a licence [issued by the Nevada Gaming Commission] to operate a sports pool.”
Nevada gaming licensees that are approved to offer a sports pool can offer DFS in Nevada, however the notice cautioned such licensees to “exercise discretion” in associating with DFS operators that have not obtained such approvals.
The two pioneers on online DFS in the US, DraftKings and FanDuel, maintain that sites like theirs offers games of skill and not chance and are therefore protected by the 2006 Unlawful Internet Gambling Enforcement Act.
That rationale is based on the purported skill of players of the fantasy sports games. The move by the Nevada board to outlaw DFS in the state does not directly dispute that notion, focusing instead of the performance of the players of the sports themselves as being material.
Both assertions may be correct but unless regulators can be convinced otherwise, DFS may well be facing a new era of prohibition stateside.
