It turns out that just because it is a new season every week, it doesn’t mean it’s not gambling.
The Nevada Gaming Control Board, the organization that oversees gambling and gambling-related activities in the state that is the home to Las Vegas, has determined that daily fantasy sports (DFS) sites like DraftKings and FanDuel are gambling. This means that the aforementioned sites will have to cease their operations in Nevada until they have filed for the appropriate licenses. This comes after the daily fantasy sports industry, which has grown into a $2.6 billion business annually, has spent hundreds of millions of dollars on advertising for this year’s National Football League season. DraftKings and FanDuel are also both facing scrutiny for an “insider betting” scandal where certain employees made wagers allegedly using information not available to the public.
“Over the last several months, Nevada Gaming Control Board staff has analyzed the legality of pay-to-play daily fantasy sports pursuant to the Nevada Gaming Control Act,” Nevada Gaming Control Board chairman A.G. Burnett wrote in the official notice to daily fantasy industry. “[The board has] concluded that DFS constitutes gambling under Nevada law.”
Finally, we’ve reached out to the Nevada Gaming Control Board to ask how it defines sports and whether that includes esports. Both FanDuel and DraftKings — along with competitors like Vulcun — all run daily fantasy games for pro gaming competitions. But those events may not fall under the same rules that apply to traditional athletics. We’ll update this post with any new information.
The Board pointed to Chapter 463 of the Nevada Revised Statues, which claims that accepting wagers on the “collective performance of individuals participating in sporting events” requires a license.
“Therefore … all unlicensed activities must cease and desist from the date of this Notice until such time as either the Nevada Revised Statues are changed or until such entities file for and obtain the requisite licenses to engage in said activities,” wrote Burnett.
The chairman also noted that local companies in Nevada with gambling licenses should avoid doing business with those that do not have the appropriate paperwork. That would seem to slow down the possibility of FanDuel and DraftKings partnering with Wynn or Caesars casinos.