Nevada miiight know a thing or two about sports gambling. Yesterday, the veteran Nevada Gaming Control Board dropped knowledge on the budding online fantasy sports world by requiring websites like DraftKings and FanDuel to obtain their gambling licenses in order to operate within the state, according to USA Today. Otherwise, it's cease and desist for the $1 billion industry's operations in the Silver State.DraftKings and FanDuel are structured in such a way that plays the line between sports gambling and skill-based gaming. Participants pay an entry fee to select fantasy teams, and are awarded cash prizes of upwards of $1 million depending on their performance. The Nevada Gaming Control Board has their own opinion of whether DFS can be categorized as gambling."We are saying that daily fantasy sports are a gambling game under the statutory definition," A.G. Burnett, chairman of the Nevada Gaming Control Board, told ESPN on Thursday night. "We're also saying that these are sports pools, which is when someone is in the business of accepting wagers on sporting events through any system or method of wagering. We have found that it is a wager, and obviously, it's on a sporting event, and DFS companies are in the business of accepting those wagers."DraftKings and FanDuel are already being investigated by the New York Attorney General for potential fraud, after an employee was accused earlier this month of using insider information to boost his own fantasy profile to win a reward of $350,000. It seems the legal parameters of such a new line of business are still being drawn.In Nevada, both FanDuel and DraftKings have followed suit and ceased operations. But both released statements yesterday promising that they would rectify the situation for their clientele. FanDuel released the following in a written statement:"We are examining all options and will exhaust all efforts to bring the fun, challenge and excitement of fantasy sports back to our Nevada fans. In the interim, because we are committed to ensuring we are compliant in all jurisdictions, regrettably, we are forced to cease operations in Nevada."DrafKings released their own statement:"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. We strongly disagree with this decision and will work diligently to ensure Nevadans have the right to participate in what we strongly believe is legal entertainment that millions of Americans enjoy."At the very least, FanDuel and DraftKings want to ensure that they're operating under Nevada's legal constraints for their own sakes. Otherwise, they could face felony-level fines and up to 10 years in prison. Yikes.
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