With Florida law arguably preventing fantasy sports for money (and the major DFS operators believing Florida allows it), the question now becomes whether other states have obscure laws that have been overlooked – and whether other states that hope to protect their own legal gambling operations (from casinos to scratch-off tickets) will take action against daily fantasy.
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Nevada’s office of the attorney general cited a three-year-old online “Ask Me Anything” interview on Reddit.com where it said DraftKings CEO Jason Robins compared his site to a casino and described the concept as a mashup between poker and fantasy sports.
Nevada players of daily fantasy sports contests have reacted angrily to the decision.
The memo is what Control Board Chairman A.G. Burnett based his order, filed Thursday, which effectively banned unlicensed daily fantasy sports operators, such as DraftKings and rival FanDuel, from offering their product in Nevada.
Neither DraftKings or FanDuel have said if they’ll pursue a license in Nevada, a process that costs $500 up front as well as hourly costs and travel expenses to cover the intense background investigation by state agents into the companies and their leaders. That law doesn’t necessarily make the sites OK in states where the definition of gambling can vary wildly depending on if the contest is entirely skill-based or mostly skill-based.
Robins said the players attracted to Boston-based DraftKings were predominantly millennial men ages 21 to 35 who are analytical and favor data and research.
Instead Nevada considers any wagering on sports pools to be a form of gambling that requires a permit from the state, Burnett said; without that permit the fantasy companies can not offer their games to people in Nevada. “They enjoy looking at something and trying to figure out something that someone else doesn’t see”.
DraftKings did not immediately respond to requests for comment. The board said it worked with the state attorney general’s office for several months to look into the sites’ legality. The opinion also states that DraftKings has applied for licensing in the United Kingdom to cover gambling software and pool betting. The company, however, never identified the licenses as gaming. As a result, if other states were to conclude that daily fantasy sports is sports betting, they likely would not be able to license it. In other words, daily fantasy sports would be outright prohibited.
However, the sites that control 90 percent of the daily fantasy sports market disagree with the board’s finding that their activities constitute sports wagering.
DraftKings’ website says it expects to award $1 billion in prizes this year; FanDuel says it expects $2 billion in payouts.
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Customers in Nevada found their daily fantasy sports accounts listed as “restricted” late Thursday night and Friday morning. The American Gaming Association issued a statement welcoming Nevada’s ruling on daily fantasy sports. Reid recently stated in Blog Roll Call, “Unless more states follow, we will have an increase in corruption and families torn apart due to unregulated illegal gambling”.
