A day later, theWall Street Journalreported that theFBI and Justice Department hadopened an investigation into whether daily fantasy sports sites violate federal law.By the end of Thursday, Nevada had told daily fantasy sports companies theyhad to cease operationsand seek gaming licenses.
Advertisement
In a single-page notice on its website, board chairman A.G. Burnett said daily fantasy sports contests where players wager money fit the definition of gambling that requires a license from the Nevada Gaming Commission to operate a sports pool.
Nevada on Thursday declared daily fantasy sports to be gambling, becoming the first state to take action against the industry since it came under scrutiny last week.
“They do their homework”, Jason Robins, the chief executive of fantasy sports Web site DraftKings, said last month, comparing his enterprise to chess.
“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”, FanDuel said in a statement to the press.
The support for the legality of daily fantasy sports in the United States has so far hinged on the “game of skill” argument-that is, because choosing the correct players to deliver points in a given contest depends on the knowledge of the participant, it shouldn’t qualify as a “game of chance”-but the authorities have moved to circumvent that argument altogether”. Casinos have to pay for state overseers to watch them count money, which raises the possibility of 45 different sets of monitors looking over shoulders at DraftKings and FanDuel.
That rationale is based on the purported skill of players of the fantasy sports games.
Aside from Nevada, five states – Arizona, Iowa, Louisiana, Montana and Washington – do not permit daily fantasy sports. It added: “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”.
Daily fantasy sports companies now operate in at least 45 US states, though a few are considering reviews on whether the activity should be treated as gambling.
Today’s notice comes after a scandal alleging that an employee of one of the sites used data unavailable to the general public to place bets and make $350,000 on games on a rival site.
Critics say the companies’ promotion of “daily fantasy sports for cash” are akin to sports gambling, which is largely illegal outside of Nevada.
Daniel Wallach, a sports regulation professional from Florida, stated the board’s determination just isn’t going to “trigger an extinction of fantasy sports from Nevada, forevermore”.
If anyone knows gambling when they see it, you would expect it to be Nevada gaming regulators.
Illinois regulators think daily fantasy sports is illegal under a state law prohibiting Internet gambling, but they plan to ask their state attorney general for a legal opinion next week.
“We saw regulation on the horizon”, he said. “And that will be the worst result for DraftKings, FanDuel and the whole industry”.
Advertisement
An aide to the Energy and Commerce Committee, which is expected to hold hearings on the fantasy industry, said the new reports “raise additional questions about the safety, fairness, and integrity of these new platforms for fan engagement” and that the committee would investigate them.
