Nevada says daily fantasy sports operators need a gambling license

nevada-daily-fanttasy-sports-is-gamblingNevada gaming regulators have ruled that daily fantasy sports (DFS) is gambling and therefore DFS operators need a license to take action from Nevada residents.

On Thursday, the Nevada Gaming Control Board issued a ‘cease and desist’ order to all DFS sites currently serving Nevada customers. In a notice posted on its website, the Board says analysis by its staff and the state Attorney General’s office concluded that DFS “constitutes gambling under Nevada law” because it involves “wagering on the collective performance of individuals participating in sporting events,” as established under Chapter 463 of the Nevada Revised Statutes.

Henceforth, any DFS operator wishing to continue its dealings with Nevada players will have to obtain the necessary sports betting license from the Nevada Gaming Commission, with all the attendant poking, prodding, fingerprinting and taxation that this process entails.

The Board says its existing sportsbook licensees “may expose DFS for play themselves” in the state but licensees “should exercise discretion in participating in business associations with DFS operators that have not obtained Nevada gaming approvals.” Licensees wishing to do business with DFS operators should also conduct “thorough and objective reviews of DFS activities under the laws of other states and any applicable federal laws.”

It seems unlikely that any DFS operator would seek to acquire a Nevada license, given the state’s small population and the fact that the license wouldn’t allow operators to enter any other state markets they’re not already serving. Plus DraftKings already has enough trouble explaining why they hold an online gambling license in the UK when what they’re doing totally isn’t gambling.

Nevada’s name will now be added to the original fab five states – Arizona, Iowa, Louisiana, Montana and Washington – in which DFS play is legally verboten. Most major DFS operators have also pulled out of Florida following word that a US Attorney in Tampa had convened a grand jury to investigate DFS’ legality, and public musings from Michigan’s gaming regulator have led to a number of sites giving that state a wide berth.

While some thought DFS was beginning to emerge from the black cloud that followed it around all last week, the events of the past few days have extinguished any such hopes. On Wednesday, word spread that the FBI and the US Department of Justice had launched a probe of DFS operators and the mainstream media has latched on to the topic as its new scandal du jour.

Meanwhile, the National Football League has reportedly been trying to convince Washington lawmakers that DFS is not the droid they’re looking for. Multiple federal pols have been clamoring for Congress to investigate the sector but Politico reported earlier this week that the NFL’s DC office had been contacting members of the House Energy and Commerce committee to try to “ward off” a hearing.

New Jersey Rep. Frank Pallone, a ranking member of the Committee who has led the charge for DFS hearings, told ESPN he wasn’t surprised by the NFL’s efforts. Pallone said the NFL is “deeply invested and are already engaging in hypocrisy by supporting fantasy sports betting while opposing sports betting at tracks and casinos.”

Pallone has some mild hypocrisy issues of his own, as his DFS antipathy is widely perceived to be an attempt to win Congressional support for rewriting the federal prohibition that prevents his home state from pursuing its sports betting hopes and dreams. But c’est la guerre…