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. The Nevada Gaming Control Board said fantasy football is gambling, but it’s not regulated – therefore, it’s no good.
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FanDuel said there is now no evidence that any employee or company has violated rules introduced by The Fantasy Sports Trade Association that “restrict access to and use of competitive data for play on other sites”.
Chairman of the Nevada Gaming Commission A.G. Burnett, said in a statement that, “While this industry notice is meant to provide clear guidance as to Nevada law, Nevada licensees wishing to conduct business with DFS companies should also conduct thorough and objective reviews of DFS activities under the laws of other states and any applicable federal laws”. That includes traditional sports books where gamblers generally wager on the outcome of a given game.
Nevada regulators govern the country’s main gambling hub in Las Vegas, and their actions could hold sway with regulators elsewhere.
“A point of clarification is in order because there are a few operators and commentators who have taken the position that the Unlawful Internet Gambling Enforcement Act of 2006 (“UIGEA”) legalized fantasy sports within the United States”, the report says.
The memorandum describes how daily fantasy sports is considered gambling under Nevada law. This year it exploded, with hundreds of advertisements, millions in revenue, and billion-dollar valuations for companies like FanDuel and DraftKings.
“Fantasy is a form of gambling that should be licensed just like sports betting, just like any other form of gambling”, he said. No other daily fantasy site or employee is mentioned in the letter. Both sites suspended operations in Nevada, but each issued a testy statement suggesting the board was only acting to protect Nevada’s lucrative gaming industry.
The move comes amid heightening scrutiny of the legal status of fantasy sports gaming in America, which is believed to have as many as 41 million active players in the US. 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”.
With similar allegations being made about a DraftKings staff member said to have made around £230,000 by playing FanDuel, the claims have prompted questions about the use of insider information in fantasy sports websites.
Edinburgh-based FanDuel, which runs online fantasy leagues in baseball and basketball for cash prizes, has stopped its 500 staff from playing its games while the US Justice Department and Federal Bureau of Investigation (FBI) probes the lucrative sector. But Burnett said the Nevada board did not weigh that issue.
Daniel Wallach, a sports law expert from Florida, said the board’s decision is not going to “cause an extinction of fantasy sports from Nevada, forevermore”.
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The opinion (read it here) says the popular “skill v. chance” argument was basically tossed aside at the outset, as under Nevada law this is “relevant only when analyzing lotteries”.
