DFS Banned in Nevada

Daily Fantasy Sports operators in Nevada have been told they must ‘obtain a gambling licence’ after the state’s Gaming Control Board declared that DFS “constitutes gambling under Nevada law.”

The two largest DFS sites, DraftKings and FanDuel, have both said they would “cease operations in Nevada” as a result of the decision.

FanDuel commented on the surprise move by the Gaming Commission by stating the ruling:

This view is not one shared by the NCB Chairman A.G. Burnett, who on Thursday said:

So DFS must therefore adhere to the regulations which govern sports pools in the state. The Nevada board stated several times that DFS services had not been made illegal, but operators would in future have to confirm to state laws on betting.

This contradicts the general guidance across most of the US which exempts DFS from the worst of the UIGEA, a federal law passed in 2006 aimed at restricting online gambling. This is the Act which has caused online poker massive problems in the US, but it included certain provisions which exempted participation in any fantasy or simulation sports game as long as certain criteria were fulfilled.

DraftKings described the NGCB decision as an exclusionary approach against the increasingly popular fantasy sports industry, while FanDuel declared themselves to be terribly disappointed by the ruling which, they say, means that 'only incumbent Nevada casinos may offer fantasy sports.'

She continued by declaring:

The latest move by Nevada – which now joins five other states in outlawing or severely restricting the massive DFS industry - comes amid ‘growing scrutiny over the legality of their business model and the oversight of their operations’.

Recent events which have over-shadowed the surge in the game’s popularity include a DraftKings employee, Nathan Haskell, releasing ‘sensitive data’ on the NFL which was not available to the general public, forcing both companies to release statements defending the integrity of their operations.

The consequences of Haskell’s actions – in a week in which he himself won $350,000 on rival DFS site FanDuel - have led to increased calls by many inside and outside of the industry to call for tighter regulation of DFS, including PokerStars recent statements on the affair.

PokerStars, who have their own DFS site –StarsDraft – said last week:

The New York Attorney General, Eric Scheiderman, announced he would be investigating “the potential unfair advantage DFS employees can gain by using sensitive information and taking part in competitions on rival sites,” and this latest news from Nevada has added to the recent woes of the DFS industry which promised to launch its own investigation into the Haskell affair.

FanDuel have reacted to the Nevada ruling by stating:

The debate over DFS, and the scrutiny of its operations, looks set to continue. In 2015 the states of Arizona, Iowa, Lousiana, Montana and Washington all made DFS services illegal, whereas Kansas this year officially enacted a law legalizing fantasy sports.